The Treasury statement: Credit rating agency S&P Global re-affirms Latvia’s credit rating
On Thursday, February 22, the credit rating agency S&P Global affirmed its 'A-' long-term foreign and local currency sovereign credit ratings on the Republic of Latvia. The outlook remain positive.
S&P Global made a deviation from its pre-established calendar, triggered by the statement of the U.S. Department of the Treasury related to the Latvia-based ABLV Bank and introduced of payment restrictions by the European Central Bank and the Financial and Capital Markets Commission (FCMC) of Latvia.
In accordance with the S&P Global, the direct fiscal risk for Latvia in relation to ABLV Bank is modest and insignificant to Latvia's public finance capability.
S&P Global outlines that no material negative effect on the core of the Latvian banking system - financial institutions focusing on serving resident deposits - is expected.
In S&P Global view, although there is a possibility that the ongoing situation could negatively affect some other domestic Latvian banks that focus on servicing non-resident clients, however it would have only a limited impact on the Latvian economy and not endanger the financial stability in Latvia.
S&P Global acknowledges the strong government's fiscal position, current and expected economic growth close to 3% in the medium term. In S&P Global view, economic growth in the medium term will be driven by strong local domestic consumption, investments supported by the EU funding cycle and exceptionally favourable foreign trade conditions.
According to a pre-established calendar of rating publication dates, the next scheduled rating publication on the sovereign rating of the Republic of Latvia will be on March 23, 2018.