Latvia’s Inflation Rate YoY Drops to 2.3% in February: Five-Month Slide Continues
Latvia’s year-over-year inflation rate declined sharply to 2.3% in February 2026 from January’s 2.9%, according to official data. This marks a significant cooling in consumer price growth, with the headline figure now at its lowest since 2021. The reading comes in just above consensus estimates and the European Central Bank’s target, reflecting a broader regional trend of moderating inflation.
Table of Contents
Big-Picture Snapshot
Drivers this month
- Food prices: +0.11pp
- Energy: +0.07pp
- Transport: -0.05pp
- Housing: +0.04pp
Policy pulse
February’s 2.3% inflation rate sits just above the European Central Bank’s 2% target, maintaining a modest gap. The Latvian central bank has reiterated its commitment to price stability, noting that the current trajectory aligns with regional disinflation trends.
Market lens
Latvian government bond yields edged lower after the release. Investors interpreted the data as a sign that inflationary risks are receding, reducing pressure for further monetary tightening. The euro held steady against major peers, reflecting a balanced market response.
Foundational Indicators
Historical context
- February 2026: 2.3%
- January 2026: 2.9%
- December 2025: 3.8%
- November 2025: 4.3%
- October 2025: 4.1%
- August 2025: 3.8%
Comparative perspective
Latvia’s inflation has dropped by 2 percentage points since November’s 4.3% reading. The 12-month average now stands at 3.6%, underscoring the pace of disinflation. The February figure is the lowest since late 2021, reflecting a decisive shift from last year’s elevated levels.
Methodology and sources
Figures are sourced from the Sigmanomics database and Latvia’s official statistics agency, based on harmonized consumer price indices. Year-over-year calculations compare each month to the same month in the prior year, ensuring consistency across reporting periods.[1]
Chart Dynamics
Forward Outlook
Scenario analysis
- Bullish (20–30%): Inflation falls below 2% by April if energy and food prices remain stable, supporting real wage growth.
- Base case (55–65%): Inflation hovers near 2–2.5% through Q2, with minor fluctuations driven by seasonal factors.
- Bearish (10–20%): Price growth rebounds above 3% if commodity shocks or supply disruptions re-emerge.
Risks and catalysts
Upside risks include renewed energy price volatility and wage pressures. Downside risks stem from weaker external demand and continued eurozone disinflation. The central bank’s stance remains data-dependent, with no immediate policy shifts signaled.
Closing Thoughts
Market lens
Latvian equities and government bonds saw muted moves post-release. The inflation data reinforced investor confidence in the country’s macroeconomic stability. With price growth now at its lowest in over four years, policymakers and markets will watch for confirmation that disinflation persists into the spring.
Key Markets Reacting to Inflation Rate YoY
Latvia’s inflation data influences a range of asset classes, from equities to currencies and digital assets. The following symbols have shown sensitivity to inflation trends, reflecting shifts in risk appetite and monetary policy expectations. Each symbol is verified as active and tradable on Sigmanomics.
- AAPL – Apple shares often react to global inflation prints, as input costs and consumer demand shift.
- EURUSD – The euro-dollar pair reflects eurozone inflation surprises, including those from Latvia.
- BTCUSD – Bitcoin’s price has shown correlation with inflation expectations, especially during periods of monetary policy uncertainty.
| Year | Latvia Inflation YoY (%) | EURUSD Trend |
|---|---|---|
| 2020 | 0.2 – 1.1 | Rising |
| 2022 | 7.5 – 21.5 | Falling |
| 2024 | 2.5 – 3.9 | Stable |
| 2026 | 2.3 | Flat |
Periods of high Latvian inflation have coincided with euro weakness, while disinflation has supported EURUSD stability.
FAQ: Latvia’s Inflation Rate YoY Drops to 2.3% in February: Five-Month Slide Continues
- What is Latvia’s current annual inflation rate?
- Latvia’s year-over-year inflation rate for February 2026 is 2.3%, down from 2.9% in January.
- How does this reading compare to recent trends?
- The 2.3% figure marks the lowest inflation rate since late 2021, continuing a five-month downward trend.
- What are the main factors behind Latvia’s inflation slowdown?
- Stabilizing food and energy prices, along with easing transport costs, have contributed to the recent disinflation.
Latvia’s inflation rate has returned to levels not seen since 2021, signaling a decisive shift in the country’s price dynamics.
Updated 3/10/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- Sigmanomics database, Latvia Inflation Rate YoY, accessed March 10, 2026.
- Latvia Central Statistical Bureau, Harmonized Index of Consumer Prices, February 2026 release.
February’s 2.3% inflation print marks a steep drop from January’s 2.9% and sits well below the 12-month average of 3.6%. The pace of disinflation has accelerated since November, when the rate stood at 4.3%. Over the past six months, Latvia’s inflation rate has declined by more than 2 percentage points, with the most pronounced falls occurring in the last quarter.
Compared to August’s 3.8% and October’s 4.1%, the current reading highlights a persistent downward trend. The last time inflation was this low was in late 2021, signaling a return to more stable price dynamics after a period of volatility.