The Ministry of Finance of Latvia recently announced that the international rating agency Standard & Poor's has upgraded Latvia's credit rating outlook from "stable" to "positive," while maintaining the credit rating at "BBB+." S&P indicated that if Latvia's economy continues to maintain stable growth over the next two years, its credit rating will be upgraded. However, if the economic growth rate exceeds that of other countries with similar income levels, Latvia should reduce its external debt and government debt.
S&P believes that Latvia's fiscal situation has improved in recent years, with the deficit decreasing from 10% in 2009 to 1.5% in 2013. If strict fiscal policies are maintained, Latvia's government debt will decrease faster than expected, leading to an upgrade in its credit rating.
Additionally, S&P forecasts that Latvia's economic growth rate will remain between 4-5% from 2014 to 2016.