S&P upgrades Latvia

S&P said it raised its long- and short-term foreign and local currency sovereign credit ratings on Latvia to A/A-1 from A-/A-2.

The outlook is stable.

The agency said the upgrade reflects Latvia's sustained strong economic and fiscal performance, while a significant decrease in nonresident deposits has reduced external vulnerabilities.

“A robust construction sector, alongside strong inflows of E.U. funds, continue to lift Latvia's economy, with this year's growth projected to again exceed 4%,” S&P said in a news release.

“Growth continues to support budgetary performance, despite procyclical fiscal policy. As a result, we expect net government debt to fall to 31% of GDP by 2021.”

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