S&P: Latvia unchanged

Standard & Poor's said the decision by President Zatlers on May 28, 2011 to initiate the dissolution of Latvia's Saeima (parliament) subject to a July 23 referendum would have no immediate impact on the ratings and outlook on the Republic of Latvia.

Latvia has BB+ and B ratings with a positive outlook.

Even if the referendum results in the calling of early elections, which may cause some short-term political uncertainty, S&P said it does not anticipate a reversal of Latvia's commitment to consolidate the general government's fiscal position in 2011 and to cut the 2012 deficit to 2.9% of GDP.

If a new government was to shift away from budgetary consolidation, the agency said it believes this would pose a risk to the ratings on Latvia.

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