Credit rating agency S&P Global upgraded Latvia`s credit rating
Credit rating upgrade reflects potential of Latvia`s economy to achieve strong growth, averaging above 3% annually over the next four years. Latvia's rating upgrade is supported by strong growth in construction sector, investment flow and successful fiscal policy with low budget deficits.
S&P Global outlines, that the liquidation of ABLV Bank and taken measures to reduce non-resident deposits in the banking sector do not pose a threat to Latvia`s financial system stability and there is no major fiscal impact. Agency points out that significant decrease in non-resident deposits has reduced external vulnerabilities, such as Latvia's short-term external debt.
S&P Global positively evaluates developments in banking sector, but they could take a negative rating action if new offence, related to money laundering, would happen. Similarly agency would react to economic stall or decrease in income levels.
Agency could raise the ratings if net general government debt declines, budget revenue increases and economy grows faster than expected.
The previous credit rating agencies S&P Global announcement was published on March 23, when agency reaffirmed Latvia’s credit rating for long-term local and foreign currency at ‘A-’ with a positive outlook.
Full press release in S&P Global homepage (registration required).