Fitch lifts Latvia view to stable

Fitch Ratings said it revised the Republic of Latvia's outlook to stable from negative and affirmed its long-term foreign-currency issuer default rating at BB+, long-term local-currency issuer default rating at BBB- and short-term foreign-currency issuer default rating at B. The BBB country ceiling was also affirmed.

The agency said financial and economic stabilization in Latvia and an improvement in the country's external liquidity support the outlook revision.

Although Latvia's fiscal deficit remains high, consolidation measures enacted to date have been substantial, the agency said. Fitch expects further budget tightening over the coming year, even if a change of government follows October's elections.

Latvia's ratings are supported by underlying political and institutional strengths, highlighted by its European Union membership, and a per capita income level much higher than most rating peers, Fitch said.

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