Fitch revises Latvia´s outlook to stable from negative
As a determining reason for changing the outlook, Fitch points out the limited impact of the Covid-19 outbreak on the Latvian economy and public finances, supported by effective and operational support measures to mitigate the effects of the Covid-19 outbreak and the resilience of the Latvian economy to external shocks.
The decision of international credit rating agency Fitch affirming the Latvia’s credit rating in A- level and upgrading the Outlook from negative to stable, points to the resilience of economy to external shocks and will serve as a ground for further attraction of investments for our country as a reliable and secure partner. According to Finance Minister Jānis Reirs.
Fich states that the relatively quick recovery owes in part to less stringent coronavirus-restrictions compared to other countries in Europe, highlighting an effective policy response that limited the early spread of the virus.
Despite the fact that a renewed worsening of the pandemic remains a source of concern, with new COVID-19 cases rising in Latvia and its neighbours, Latvia's economic indicators, economic performance and favourable financing conditions provide support to the ratings, says the agency.
Fitch forecasts that Latvia's GDP will fall in 2020 below the agency's initial forecast of 5.2%. GDP growth of 4.6 % and 3.2 % is already projected in 2021 and 2022, which is in line with trends in foreign demand and domestic consumption. Service sectors such as tourism and transport are likely to suffer permanent losses, although Latvia´s flexible labour market could eventually help limit the impact on those employed in the industry.
The previous credit rating agency’s Fitch announcement was published on April 10, 2020, when agency affirmed Latvia’s credit rating in ‘A-’ with a negative outlook.
Full press release in Fitch homepage.
Eva Smite-Kregere
Public relations specialist
Phone: +371 67 094 324
Mobile phone: +371 26 499 049
e-mail: Eva.smite-kregere@kase.gov.lv