Credit rating agency Moody`s Investors Service re-affirms Latvia’s credit rating
One of key drives for the credit rating agency to affirm credit rating at the current level is Latvia`s continued strong growth performance with average growth 3.3% between 2014 and 2018 through economic cycle and it is in line with the average of the ‘A’ rating group. The position in this rating group is also supported by the Latvian government’s low and declining levels of debt.
Small nature of Latvia's economy means to be exposed to a number of external factors – including the geopolitical risks that could impact further moves of the credit rating. However, Moody's Investors Service positively evaluate the ability to adjust and adapt the changing external environment and expects that economic growth will continue to remain robust at 3.0% and 2.8% respectively in 2019 and 2020.
The stable outlook reflects Moody`s Investors Service expectations that the country's fiscal strength will be maintained and on-going government efforts to reduce banking sector risks related to money laundering and the financing of terrorism will continue.
The agency draws attention to Latvia's long-term challenges that relate to demographic issues and its effect to competitiveness. Agency could take a negative rating action in the event of a substantial weakening of the government's fiscal position or a weakening of efforts to curb money laundering-related risks associated with the country’s financial system.
The previous credit rating announcement was published on April 12, 2019, when the international credit rating agency Fitch Ratings re-affirmed Latvia’s credit rating at ‘A-’ level with a stable outlook.
Full press release in Moody`s Investors Service homepage.