Life in Latvia no longer cheap: food and clothing now pricier than EU average

New Eurostat data on household final consumption price levels show that Latvia is no longer among the cheapest countries in the European Union. Overall, prices for goods and services in Latvia are 17% below the EU average, but the picture varies sharply by category.

Food and clothing already pricier

Latvians pay 7.5% more than the EU average for food, 4.6% more for clothing and footwear, and 5.2% more for alcohol and tobacco products. These are everyday necessities that are hard to cut back on, making them the biggest strain on household budgets.

Services and housing still cheaper

The overall price level of 83% of the EU average is kept down by local services and housing costs. Housing in Latvia costs 44% less than the EU average, healthcare 31% less, education 20% less, and transport 16% less.

Citadele bank economist Kārlis Purgailis explains that the trend is driven by rapid wage convergence across the Baltic region, which pushes producers and retailers to raise prices to cover rising labor costs. Because food and clothing are easily imported goods, their prices reach European levels first, while the local services sector is still catching up.

Differences within the Baltics

Lithuania's overall price level matches Latvia's exactly, at 83% of the EU average, with a similar cost structure in both countries. Estonia, however, has nearly reached the EU average at 101%, with pricier food, clothing, alcohol and tobacco, and housing costs also approaching the EU norm.

Across the EU in 2025, price levels ranged from 63% to 140% of the average. The most expensive countries were Denmark (140%), Ireland (136%) and Luxembourg (132%), while the cheapest were Bulgaria (63%), Romania (65%) and Poland (73%).