Standard & Poor’s returns Latvia’s credit rating to investment grade

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.”

5 thoughts on “Standard & Poor’s returns Latvia’s credit rating to investment grade

  1. Has the Finance Ministry ever taken notice of Prof Michael Hudson’s and others, views of how to turn around the current on-going bank debt? He states very clearly where the problems ly, & how to turn the economic situation around. Check out his website; and MMT Italy .. 2012 (esp upload #10) Someone had the foresight to invite him and Jeffreys to Latvia to show where the fundamental problems lay, and how to correct them. Making a comparison against other’s failures is not a big deal. True .. there is always someone worse off .. but that is not the point. Full recovery is the point.

  2. Naive, naive, naive. When Eurpe falls, will Latvia be able to support it monetarily, financially, or economically? Betcha Latvia falls too ! The rating change means zero.

  3. Ed Bloom: 1. Why should Europe fall? 2. Is that your expectation / hope? 3. Fall to who? Who /what takes over? Wouldn’t it better to post this in the Forum?

  4. Hey Maris, Since the WW 2, when Germany knew it would loose the war, plans were being made to recover, recoup, and re-conquer again. It has now done this monetarily, via the Euro, and economically. So, 100 % Europe is/will be under German control, conquered by Germany if you like! All that’s missing now is a undisputed strongman. By the way, he’s already in the wings, waiting for his moment to enter. Remeber the name Guttenberg. Maris. if there’s anything else you’d like to know, just ask. I’ll be happy to inform you

  5. The oligarchs were looting the Latvian government before. The oligarchs are looting the Latvian government now. There has been no improvement whatsoever, except pensions have been slashed. Somehow S&P thinks things have gotten better?!?!?

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