Fitch Ratings Affirmed the Same High Lithuania’s Credit Rating with a Stable Outlook
On Friday, the international credit rating agency Fitch Ratings once again affirmed the A long-term borrowing rating previously granted to Lithuania and maintained a stable outlook.
According to Fitch Ratings experts, Lithuania's A rating is based on the country's reliable political system, membership in the European Union and governance indicators that exceed the median of countries with the same rating. According to the agency, Lithuania's economy and public finances were relatively resistant to the negative effects of the pandemic and the war in Ukraine.
The agency notes that last year the general government deficit halved to 0.6 % of GDP, when in 2021, it was 1.2 % of GDP, which is well above the value in the adjusted 2022 budget (4.9 % of GDP) and the agency's own forecast (2 % of GDP). Considering better than 2022 results and reduced energy prices, Fitch Ratings projects that in 2023, the budget deficit will amount to 2.3 % of GDP.
At the end of 2022, the general government debt decreased by 5.3 percentage points to 38.4% of GDP, which is significantly lower than the median of the countries with the same ranking (50.8 % of GDP). Fitch Ratings expects that by 2027, the debt will decrease to 37.4 % of GDP.
Fitch Ratings last upgraded Lithuania's credit ratings in January 2020, when the long-term borrowing rating was upgraded from A- to A. The agency's latest report is available here.
Last April, another international credit rating agency, Moody's Investment Service, affirmed Lithuania's long-term borrowing rating A2 (stable outlook) granted in February 2021; S&P Global Ratings maintained the A+ long-term credit rating granted in February 2020, changing the outlook from stable to negative, and DBRS Morningstar last Friday reaffirmed the A (high) long-term borrowing rating (stable outlook) granted in November 2021. More information is available here.
Additional information:
A credit rating is an indicator providing investors (creditors) with concise information on the level of the debtor’s capacity to discharge its financial commitments. A high credit rating indicates a lower risk of the debtor’s (issuer’s) default, and, accordingly, a lower cost of borrowing.
Fitch Ratings is part of a group of influential credit rating agencies, including S&P Global Ratings and Moody's Investors Service. For credit ratings they use particular grades and symbols, and set a credit value to borrowing countries and companies by using standardized credit ratings.
Last updated: 01-06-2023
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