On January 25, Japanese credit rating agency R&I maintained Latvia’s credit rating at A-level with a stable future outlook, the State Treasury reported.
In spite of the negative effect from Covid-19 pandemic, which caused a massive decline for Latvia’s economy in 2020, the agency claims the framework of economic growth is not affected and it is likely economic growth rates will recover once the influence of the epidemic goes down.
The agency believes Latvia’s economy may grow slightly in 2021. Thanks to the European Recovery and Sustainability Mechanism and finances provided by it, as well as investment projects, a more rapid economic growth may come along with 2022.
The agency believes that if the government succeeds limiting the state budget’s deficit, it will help balance the state debt’s relative level before GDP decline trend.
As one of the challenges the state economy might face, the agency mentioned the country’s long-term negative demographic changes, specifically population decline, which would affect social and healthcare system in the future. The agency follows the government’s strategy when it comes to long-term demographic challenges.
The previous report for Latvia was published by the agency on December 2, 2019, when the country’s rating was upgraded to A-level, maintaining stable future outlook. (BNN/Business World Magazine)