S&P Retains Latvia's Sovereign Ratings

(RTTNews) - Standard & Poor's Ratings Services maintained sovereign ratings of Latvia as the fiscal position of the nation remains strong.

The rating was retained at 'A-' with stable outlook. The outlook balances upside potential for fiscal performance and downside risks associated with its sizable non-resident deposits in the banking system.

S&P said the ratings remain supported by strong institutional effectiveness, moderate general government deficits and declining net public debt.

Although risks to government stability increased recently, a major shift in policy direction is not expected, the agency said.

The economy is forecast to expand 2.4 percent this year, which would be followed by growth averaging just over 3 percent in 2016-2018.

Fiscal position remains a key ratings' strength. According to S&P, general government deficit will remain contained at 1.6 percent of GDP.

On the other hand, the country's external position remains a ratings constraint. The current account deficit is expected to widen gradually as the trade balance deteriorates, it said.