May 02, 2012
New York-based Standard & Poor’s, one of the leading services used by investors to gauge the degree of risk, has increased its short- and long-term credit rating of Latvia, the company announced May 2.
The agency raised its evaluation to BBB-/A-3 from BB+/B, marking the first time Latvia has returned to investment grade since February 2009.
“The ratings on Latvia,” the agency announced in a press release, “balance our view of the government’s proven political commitment to fiscal discipline, the economy’s considerable flexibility, and the material increase in exports as a share of GDP, against the constraints of large (albeit decreasing) external debt, relatively moderate GDP per capita, and a lack of monetary policy flexibility.”
International investment ratings agencies—including Standard & Poor’s, Fitch Ratings and Moody’s Investors Service—in 2008 and 2009 lowered Latvia’s rating as the country struggled with the effects of an overheated economy and the global recession.
Latvia’s finance minister, Andris Vilks, reacted with pleasure to the news.
“Latvia at the moment is in a truly unique situation,” he said in an announcement posted on the Finance Ministry’s website, “because at time when the economic activity in the European Union is falling and the credit rating of a majority of member states is being decreased, in our country it is being increased.”