In Latvia, the Ministry of Economics has projected that the average annual inflation for this year will range between 2.5% and 3%. Factors influencing inflation in Latvia will continue to include fluctuations in energy and food prices on global markets, geopolitical events, and the overall pace of economic growth worldwide. Additionally, both supply-side factors, such as revisions of taxes and regulated tariffs, and demand-side factors, primarily driven by wage increases, will further impact the purchasing power of consumers.

In January, atypical price dynamics were observed. There was a considerable decrease in service prices and reduced pressure from food prices, which curtailed the traditional January uptick in pricing. According to data published by the Central Statistical Bureau, in January 2026, compared to December 2025, the consumer price level remained unchanged. While prices for goods increased by 0.3%, the prices for services decreased by 0.8%. This unusual dynamic underscores how specific market conditions and consumer behavior can influence price trends, particularly in the early months of the year.

The Ministry highlights that January typically exhibits unique characteristics in pricing, often influenced by seasonal factors and market adjustments. The upcoming months may provide more predictable patterns, but attention will remain on global influences that could sway local inflation rates significantly. Understanding these dynamics will be essential for policymakers as they navigate the economic landscape and attempt to stabilize prices amidst ongoing uncertainties.