Latvia's Economic and Financial Outlook
Latvia's Credit Ratings are on an Improving Trend
Rating agencies acknowledge Latvia's low general government debt, small fiscal deficit and institutional strength as key
factors bolstering its creditworthiness. In September 2018, S&P raised its sovereign credit rating on Latvia to A from A-.
Long-term Foreign Currency Rating Development
7
S&P
Fitch
Moody's
J
2012
2013
2014
2015
2016
2017
2018
2019
A/A2
A-/A3
BBB+/Baa
BBB/Baa2
BBB-/Baa3
BB+/Ba1
Key Strengths of Latvia's Sovereign Credit Profile
•
Sustained strong economic and fiscal performance
Eurozone membership further strengthens Latvia's creditworthiness:
underpins economic policy coherence and credibility
•
-
-
improves fiscal and external financing flexibility
reduces foreign-currency risks on balance sheets
gives Latvian banks access to European Central Bank liquidity facilities
Membership in the OECD with its accompanying commitments to
structural reforms and economic liberalization
Sound banking sector - strong Scandinavian banks play central role in
sector
Key Risk Factors Affecting Latvia's Sovereign Credit Profile
.
External financing risks and geo-political tensions with Russia continue
to constrain the ratings
• Latvia is a small and highly open economy, making it vulnerable to external
shocks
•
Latvia's GDP per capita is below the median level of its 'A' category peers
Source: S&P, Fitch and Moody'sView entire presentation