News

In its recent statement released on April 3, 2014, Fitch has reaffirmed Lithuania’s long term credit rating at ‘BBB+’ and has increased its long term outlook from stable to positive. This means Lithuania continues further improving its international financial reputation after the significant blow suffered during the 2008 global economic meltdown.

Four factors have been outlined as key contributors to the current improvement: Lithuania’s high probability of joining the Eurozone from January 2015; sound and coherent economic policy of the country; positive near-term GDP growth prospects, which currently stand at 3.1% for 2014; and significantly reduced fiscal deficit, which is expected to stay below 2% this year.

Among other key drivers Fitch also notes the stability of Lithuania's banking sector, which is closely interlinked with the Scandinavian banking system, as well as strong governance and effective policy-making (Lithuania’s indicators of Human Development Index, Governance and Ease of Doing Business are significantly higher than the 'BBB' median).

The factor that may affect Lithuania’s growth prospects is the possible material escalation in developments between Russia and Ukraine that would lead to a significant external shock to Lithuania's economy.

However, Fitch's sensitivity analysis does not currently anticipate internal or external developments that could force international markets to revise Lithuania’s long term credibility.

See full report here (PDF 411.5 kb)

Source: Reuters.com