Credit rating agency Standard & Poor’s (S&P) has downgraded the credit ratings of Estonia, and also of Latvia Lithuania, as a result of threats associated with the Russian Federation.
S&P downgraded Estonia’s long-term credit rating from “AA-” to “A+”, while Latvia and Lithuania’s ratings, previously each at “A+”, were also downgraded, to “A” in both cases.
According to S&P, both the Russian war in Ukraine and broader regional geopolitical threats in the Baltic Sea region are further expected to affect economic growth, public finances and competitiveness, in Estonia in the medium-term.
While inflation EU-wide peaked at around 9%, inflation at its highest point in the three Baltic States rose above 20%.
Despite all this, S&P considers the credit outlook for Estonia, Latvia and Lithuania to remain stable.
This outlook reflects the agency’s confidence that the war will not spread beyond Ukraine’s territory, including that currently occupied by the Russian Federation, to that any NATO member state.
All three Baltic States have been NATO and EU members for 20 years now. (ERR)