Latvia's Retail Sales for November 2025 rose by a modest 0.30% month-over-month (MoM), defying expectations of a 0.60% decline and following a strong 1.20% increase in October. This latest figure, sourced from the Sigmanomics database, signals a continued but slowing consumer spending momentum in the Baltic state. Compared to the subdued readings earlier in 2025, including a -0.70% dip in October and a -0.70% in June, November’s positive print suggests resilience amid mixed macroeconomic signals.

Drivers this month

• Moderate growth in non-food retail segments offset weaker food sales.
• Holiday season preparations contributed to increased discretionary spending.
• Stable employment and wage growth supported consumer confidence.

Policy pulse

The 0.30% growth sits comfortably above the central bank’s inflation-adjusted consumption target, indicating that monetary tightening has not yet severely dampened retail activity. The Latvian central bank’s cautious stance on interest rates appears justified given this resilience.

Market lens

Immediate reaction: The EUR/LVL currency pair showed a slight appreciation of 0.10% within the first hour post-release, reflecting market relief at the better-than-expected retail sales data. Short-term bond yields remained stable, signaling tempered inflation concerns.

Examining core macroeconomic indicators alongside retail sales reveals a nuanced picture. Latvia’s unemployment rate held steady at 6.20% in November, while average wages increased by 3.10% year-over-year, supporting consumer spending power. Inflation remains elevated at 4.50%, pressuring real incomes but not yet curbing retail demand significantly.

Monetary Policy & Financial Conditions

The European Central Bank’s (ECB) recent rate hikes, culminating in a 4.50% benchmark rate, have tightened financial conditions across the Eurozone, including Latvia. Despite this, credit growth to households remains positive at 2.40% annually, suggesting that borrowing costs have not yet curtailed consumer credit uptake.

Fiscal Policy & Government Budget

Latvia’s fiscal stance remains moderately expansionary, with a 2025 budget deficit target of 2.80% of GDP. Increased social transfers and targeted subsidies have bolstered household disposable income, cushioning the impact of inflation and supporting retail sales.

External Shocks & Geopolitical Risks

Geopolitical tensions in Eastern Europe continue to pose risks to Latvia’s trade and consumer confidence. However, stable energy supplies and diversified trade partners have mitigated immediate shocks, allowing retail activity to maintain positive momentum.

What This Chart Tells Us

Market lens

Immediate reaction: EUR/LVL currency pair appreciated slightly by 0.10%, reflecting market confidence. Short-term government bond yields remained flat, indicating stable inflation expectations. Equity markets showed mild gains in consumer discretionary sectors.

Looking ahead, Latvia’s retail sales trajectory will hinge on several key factors. The base case scenario, with a 60% probability, forecasts continued modest growth of 0.20%–0.50% MoM through Q1 2026, supported by stable employment and fiscal stimulus.

Bullish scenario (20% probability)

• Stronger wage growth outpaces inflation, boosting real incomes.
• Improved geopolitical stability enhances consumer confidence.
• Monetary policy easing in the Eurozone lowers borrowing costs.

Bearish scenario (20% probability)

• Inflation accelerates beyond 5%, eroding purchasing power.
• ECB further tightens monetary policy, increasing credit costs.
• External shocks disrupt supply chains and consumer sentiment.

Policy pulse

Monetary authorities will monitor retail sales closely as a barometer of inflationary pressures and consumer resilience. Any sustained slowdown could prompt a reassessment of rate hikes, while persistent strength may justify further tightening.

In summary, Latvia’s November 2025 retail sales data from the Sigmanomics database reveals a cautiously optimistic consumer sector. The 0.30% MoM growth surpasses expectations and suggests that despite inflation and tighter financial conditions, household spending remains resilient. This resilience is underpinned by steady labor market fundamentals and supportive fiscal policies. However, risks from inflation volatility and geopolitical uncertainties remain, warranting close monitoring.

As Latvia navigates these headwinds, retail sales will serve as a critical indicator of economic health and policy effectiveness in the coming months.

Key Markets Likely to React to Retail Sales MoM

Retail sales data often influences currency, bond, and equity markets sensitive to consumer demand signals. The following five tradable symbols have historically tracked Latvia’s retail sales trends or broader Baltic consumer sentiment:

• EURLVL – The Euro to Latvian Lats currency pair reacts to shifts in retail-driven economic sentiment.
• OMX – Baltic stock index sensitive to consumer discretionary sector performance.
• USDEUR – Eurozone currency pair reflecting broader monetary policy impacts on Latvia.
• BTCUSD – Bitcoin’s price often inversely correlates with consumer confidence and risk appetite.
• RIG – Energy sector stock influenced by geopolitical risks affecting Latvia’s external environment.

FAQs

What does Latvia’s Retail Sales MoM indicate?

It measures the monthly change in consumer spending, reflecting economic health and consumer confidence.

How does this data impact monetary policy?

Stronger retail sales may prompt tighter monetary policy to control inflation, while weaker sales could lead to easing.

Why is the November 2025 reading important?

It signals consumer resilience amid inflation and geopolitical risks, guiding policymakers and investors.

Takeaway: Latvia’s November retail sales growth, though modest, signals a resilient consumer sector navigating inflation and tightening financial conditions, setting the stage for cautious optimism in early 2026.

Updated 12/30/25