Japanese credit rating agency R&I affirms Latvia's credit rating in “A” level.
Despite the negative impact of the Covid-19 pandemic, were as a result Latvia's economy shrunk sharply in 2020, agency noted, that the economy's growth fundamentals remain intact so that the economy is likely to return to its pre-pandemic growth trajectory once the pandemic settles down.
Agency considers that the economy would grow only moderately in 2021, but thanks to funds from the EU Recovery and Resilience Facility and the implementation of an investment project, it believes the economy is likely to experience a high growth for the next few years from 2022.
If the government could trim the fiscal deficit as planned in 2021, R&I believes that the debt ratio would start falling.
Agency sees that from a long-term perspective, the country's demographic change will be the focus when evaluating its economic fundamentals. Population decreases could hinder economic growth, not to mention the social security system and healthcare spending. R&I will observe a demographic shift and a government approach to it.
The previous credit rating announcement from R&I was published on 2nd December 2019 , when Japanese credit rating agency R&I upgraded Latvia`s credit rating from A- to A and affirmed credit rating outlook Stable.
The full text of a publication is available on the Agency’s R&I web page.