International ratings agency Fitch Ratings has affirmed Latvia’s sovereign credit rating at ‘A-‘, maintaining a stable outlook, the agency announced in a statement.

Fitch attributes the rating to Latvia’s credible economic policy framework, supported by its membership in the European Union (EU) and the euro area. Other key factors include the country’s continued low levels of public debt and debt-servicing costs compared to similarly rated peers, as well as moderate levels of private sector debt.

However, the agency warns that an escalation of geopolitical risks could negatively impact Latvia’s economic growth and its public and external financial positions – factors that could lead to a downgrade of the credit rating.

On the positive side, Fitch notes that a reduction in Latvia’s debt-to-GDP ratio – potentially achieved through fiscal consolidation – could support a future upgrade. The outlook could also improve if geopolitical tensions ease, reducing the risk of external shocks to the economy.

Fitch last assessed Latvia’s credit rating on November 15, 2024, when it affirmed the ‘A-‘ rating but revised the outlook from positive to stable.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited)