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Friday 21.09.2018 | Name days: Matīss, Modris, Mariss
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Economists: further credit rating improvements depend on state budget sustainability

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

Even though Latvia’s credit rating future outlook improvement is good news, the international rating agency Standard & Poor’s Ratings Services’ decision was already expected and is not surprising, the economists indicate.

SEB banka’s socio-economic expert Edmunds Rudzītis (Rudzitis) points out that at the point when several eurozone countries’ credit ratings are being reduced, Latvia’s future credit outlook improvement is gratifying, although logical, given Latvia’s economic recovery process.

During the economic dip, Latvia’s credit rating was downgraded too low, compared to other Baltic States; consequently, the credit rating agencies’ assessment should be by a notch higher than it currently is, to adequately reflect the degree of risk based on which Latvia is evaluated on the financial markets, Rudzitis considers. He also forecasts that, for example, S&P will be followed by the credit rating agency Fitch Ratings and it is possible to expect Latvia’s credit rating rise to investment grade already in the first half of 2011.

According to Rudzitis, the credit rating improvement will open up more opportunities for Latvia to refinance its bonds in the coming years. However, other factors, such as the business environment improvement measures, sound fiscal policy and sustainable budget, are required for investment attraction.

Moreover, the senior economist at Swedbank Dainis Stikuts also believes that the upgrade of Latvia’s credit rating future outlook was expected and is tied to the economic recovery – the gross domestic product is growing, the unemployment is declining, while the financial system has become stable.

However, the credit rating improvement, and, most importantly, attaining the investment category is largely related to the state budget sustainability, namely, on the structural reforms and their capacity to promote balanced economic development, as well as further shadow economy reduction. The sooner the government takes the necessary steps, the faster the credit rating will be upgraded, Stikuts is convinced.

The business news portal BNN already reported that S&P has improved Latvia’s credit rating from stable to positive.


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  1. hilary says:

    That’s good news for Latvia. Hope other agencies do the same!

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