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Credit rating agency Fitch re-affirms Latvia’s credit rating

Created : 02.05.2018.
On Friday, April 27, the credit rating agency Fitch reaffirmed its 'A-' long-term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook remains stable.

   Agency outlines that Latvia's ratings are supported by solid public finances, as well as successful public finance management what is reflected in moderate budget deficit and low levels of general government debt. 
   Fitch points out that although recent developments in the Latvian banking sector have had a negative impact on the Latvian Republic, however, the measures taken by the institutions to mitigate risk and develop the sector leave a positive impression, as a result, by end-February 2018 non-resident deposits were 30 % of the total, compared with 55 % at end-2015.
   Fitch positively evaluates Latvia's strong economic growth which over the last five years has reached an average of 2.8 % and is line with high ‘A’` rating group peers.
   The average general government debt of the ‘A’ group is 47.4 % of gross domestic product (GDP); however, the general government debt in Latvia in 2017 was 40.1 % of GDP, which confirms the consistent implementation of stringent fiscal policy.
   Agency outlines that current development of credit rating is restricted by vulnerability of the economy to external shocks, and comparatively lower income levels when compared the median level of its ‘A’ category peers. 
   Agency notes that credit rating could be raised if the level of public debt declines, stable and sustainable economic growth fostering higher income per capita without the risk of economy overheating is observed.

The previous international credit rating agencies announcement was published on March 23, when S&P Global reaffirmed Latvia’s credit rating for long-term local and foreign currency at "A-" with a positive outlook.

Full press release in Fitch homepage.