In the first quarter of 2026, employer spending on labor in Latvia increased by only 2.3% compared to last year. This is significantly lower than the average figures for both the European Union and the eurozone.
The growth of labor costs in Latvia has been one of the most moderate in the European Union.
According to data from the EU statistical office Eurostat, in January–March, the average hourly costs for employers on employees in Latvia increased by 2.3% compared to the same period last year. In comparison, the average across the EU rose by 3.6%, and in the eurozone countries, it increased by 3.2%.
The fastest growth in personnel costs was recorded in Hungary, where expenses increased by 16%. This was followed by Bulgaria (13.4%), Croatia (9.6%), Lithuania (8.6%), and Poland (7.2%).
Among the Baltic states, Latvia showed the lowest growth rates. In Estonia, labor costs increased by 6.2%, while in Lithuania, they rose by 8.6%.
It is noteworthy that the growth of employer expenses was registered in all EU countries for which data is available.
The situation varied significantly across sectors.
In industry, labor costs in Latvia grew by 3.7%, slightly exceeding the average figure for the European Union. In Lithuania, the growth was 9%, while in Estonia, it was 6.6%.
The most unusual situation occurred in construction. While the average employer expenses in the construction sector across the EU increased by 4.2%, in Latvia, they actually decreased by 0.4%. In neighboring countries, the opposite trend was observed: in Lithuania, growth reached 6.3%, and in Estonia, it was 8.3%.
In the services sector, Latvian employers spent 2.5% more on personnel than a year earlier. This is also below the average figures for the EU and the eurozone.
For businesses, such data means that the pressure from personnel costs in Latvia is currently growing slower than in many other European countries. At the same time, for employees, this may indicate a more moderate growth in wages and related payments compared to neighboring states.
Labor cost statistics include not only salaries but also bonuses, various allowances, as well as mandatory tax and social contributions from employers.
Despite the overall growth in employee expenses, Latvia remains among the EU countries with the most moderate dynamics of labor costs. This is particularly noticeable against the backdrop of Lithuania and Estonia, where employer expenses are growing significantly faster.
