“This is indeed a high appraisal of what we have accomplished as a state and society,” said Finance Minister Andris Vilks.
In its report, Fitch assessed Latvia’s banking sector as stable, underlining its accession to the Eurozone as having minimized currency exchange risks and offering new liquidity prospects for banks.
However the ratings agency indicated that Latvia still faces long-term challenges, primarily in raising income levels closer to the average in other European Union member states. Levels of external debt also remain high, despite being comprised mostly of obligations on the part of financial institutions to their maternal banks.
Further hikes in the rating could come in the event of continued economic growth over the long-term, barring the appearance of new macroeconomic imbalances or worsening of the state of public finances or external debts. The ratings could be reduced in case of external shocks creating instability in the banking sector, disruptions to economic growth or other fiscal and debt indicators.
This is the first time since 2007 that Latvia's credit rating has returned to 'A-', prompting Vilks to tweet on May 30, following a previous upgrade from Standard & Poor's that "We're back in the A-level big leagues after so many years!"
Pēc daudzu gadu prombūtnes beidzot Latvijas kredītreitings atgriežas A līmenī! Esam atpakaļ augstākajā līgā!
— Andris Vilks (@AndrisVilks) May 30, 2014
