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Ceturtdiena 24.05.2018 | Name days: Marlēna, Ilvija, Ziedone
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Fitch upgrades Latvia credit rating

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

Fitch Ratings has upgraded Latvia credit rating with positive outlook, Swedbank senior economist Dainis Stikuts told the business news portal BNN.

The move is mostly linked with the economic recovery, namely, the GDP is growing, the unemployment is dropping, the finance system is stabilising and the budget deficit is more or less but reducing.

Two of the leading rating agencies – Moody’s and Fitch, have already returned Latvia to investment grade. This gives way to refinancing the external debt gradually, Stikuts says, adding that this is no reason to slow down the economic policy and structural reforms must move on.

Latvia credit rating is still lower than Lithuanian and Estonian one. Further upgrades depend on the performance of the structural reforms and whether they will promote balanced economic recovery and shadow economy combat. The sooner the government takes action, the sooner we will see further upgrades, resulting in cheaper debt servicing and stronger growth, Swedbank economist says.

According to the Finance Ministry, Fitch Ratings have risen Latvia credit rating to BBB- with a positive outlook, similarly, it has also increased long-term local currency rating to BBB from BBB-, while for short-term foreign currency rating  – to F3 from B.

This decision returns Latvia to investment grade after more than one and a half year. This is a very important and long-awaited signal for both securities investors and private sector investors, also helping to attract investors to the Latvian economy. Moreover, this means we are on the right track, Latvia Fiance Minister Andris Vilks says.

«Latvia is making good progress in its recovery from a severe financial crisis, warranting a return to investment grade. Economic growth and re-balancing, strong fiscal consolidation and signs of stabilisation in the financial sector are evidence that downside risks have eased materially,» according to Fitch Ratings.

Similarly, growth outlook has been improved as well with Fitch forecasting growth of 3.5% in 2011 and 4% in 2012, which is much more than forecast before. The country’s macroeconomic situation has stabilised. Unit labour costs have become more competitive, allowing sustainable growth in a medium term.

Financial markets have stabilised significantly, the agency indicates, pointing at considerable drops in interbank rates. The government has extended maturities on its domestic debt. Moreover, Fitch considers there is barely any risk of LVL devaluation.

The credit rating of Latvia is also supported by political and institutional strengths, especially due to the country’s membership in the EU and higher per capita income than in most countries of similar ratings.


Leave a reply

  1. YUT says:

    Towards economic recovery!

    Thumb up 0 Thumb down 0

  2. Altaid says:

    Higher per capita income than Zimbabwe or Somalia May be ? But in Europe the lowest one That is sure !

    Thumb up 0 Thumb down 0

  3. Ruth.lt says:

    Seems like a good improvement.

    Thumb up 0 Thumb down 0

  4. Nino says:

    What a good new So let us borrow money that we wont be capable to repay .

    Thumb up 0 Thumb down 0

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