Credit rating agency Fitch affirmed Latvia long term foreign and local currency sovereign credit ratings at 'A-' 31/01/2018
On Friday, October 27, the international credit rating agency Fitch affirmed its 'A-' long term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook is set stable.
Fitch notes that the Latvia’s belonging to the high `A` category is supported in by conservative fiscal policy and low levels of government debt which continues to decline moderately, reaching 38.1% of gross domestic product (GDP) in 2017, while the average general government debt for peer countries in ‘A’ category reaches 48.2% of GDP.
The agency positively evaluates also the rapid average growth of the Latvian economy in five-year period, however, points out that GDP per capita is still below ‘A’ category average.
Fitch recognizes the economic development, fiscal consolidation and mitigation of macroeconomic imbalances, all contributing to more stable economy growth in recent years, notwithstanding the fact that Latvia’s economy, as other small and open economies, is vulnerable to external shocks.
The credit rating is further strengthened by a strong banking sector, most of Latvia's operating banks are foreign-owned, which reduces contingent liabilities for the government. Moreover, the share of foreign deposits in the Latvian banking sector, which was previously considered a risk factor, continue to decline.
Earlier, on September 22, 2017, the international credit rating agency S&P Global announced a decision to revise outlook to positive from stable and affirm Latvia's credit rating at "A-" level.
The full press release in Fitch homepage.