Moody’s keeps Latvia`s credit rating level at A3 with stable outlook
According to Moody`s view Latvia's current credit rating is supported by the flexibility of our economy and the government's track record of effective policymaking. Latvia's current credit rating reflects the moderate, though increasing, public debt mainly due to the increase in defense spending toward 5% of GDP. In the same time rating agency also notes that government has identified structural expenditure cuts related to increasing public sector efficiency and lowering administrative costs.
Moody’s forecast real GDP growth of 1.0% in 2025 and 2.6% in 2026. Latvia's economic and fiscal metrics could improve at a faster pace than Moody’s currently expect, particularly if public investment projects are swiftly implemented and reforms to tackle structural challenges in the labor market lead to higher trend growth.
Stable outlook reflects balanced risks at Latvia`s current credit rating level, as rating remain constrained by its vulnerability to external economic shocks and geopolitical risks.
The full press release is available on the Moody`s Investors Service website https://www.moodys.com (registration necessary).