Latvia Stability Programme Report

36 INVESTMENT HIGHLIGHTS Latvia has previously shown a strong ability to recover rapidly and overcome external shocks thanks to its flexible and resilient economy, a sustainable fiscal policy and the government's ability to ensure swift policy-making in emergency situations Flexible and Resilient Economy → Government swift actions to stabilize the economy Sustainable Fiscal Policy → General government debt level moderate and sustainable, and in line with Stability and Growth Pact →Fiscal metrics remains strong despite Covid-19 impact Resilience towards external shocks → Proven track record in overcoming economic crisis in the past → Steps taken to diversify sources of energy supply and bolster energy security Belongs to the Core of Europe → Eurozone membership → Member of all the important international organisations, incl. NATO →Security in the context of potential Russian agression Banks Well Capitalised, Profitable and Liquid → Predominantly foreign owned, resident-serving banking sector Predictable public policies and outstanding track record of successful structural reforms Stable <<A>>> Credit Ratings → Flexibility of the economy and economy's sound external profile → Progress made towards enhancing energy security → NATO presence and security guarantees mitigating geopolitical risks Diversified Export → Exports continue to grow despite the delays in supply chains impacted by Covid-19 and geopolitical situation

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