Moody’s Upgraded Lithuania’s Borrowing Rating Perspective


2014 09 11


Vilnius, September 11. International rating agency Moody’s has positively assessed Lithuania’s steps towards sustainability of public finances and upgraded the country’s long-term borrowing rating perspective from stable to positive. The rating itself (Baa1) pro tempore remained unchanged.

The decision of the agency is based on the fact that our country will adopt the euro next year thus eliminating the foreign exchange risk and cutting operational expenses. This will improve Lithuania’s trade competitiveness and accelerate its integration to the euro area. The rating agency also notices that after the introduction of the euro Lithuanian general government debt ratio in foreign currency loans will diminish as compared to total general government debt.

Other factor which predetermined a positive change in the perspective evaluation is a successful implementation of the Government Fiscal Consolidation Programme which allowed to cut general government expenditure from 44.9 % of GDP in 2009 to 34.4 % of GDP in 2013.

Moody’s anticipates that Lithuanian budget revenue growth in 2014-2015 will be stimulated by sound economic growth and increase in excise duties on cigarettes and alcohol up to minimum rates set in the EU rules.

The rating agency notices that in the future the upgrading of Lithuania’s rating will be influenced by stable economic growth allowing to decrease the impact of external shocks and further Government fiscal policy development raising Government possibilities, if necessary, to assume a part of external shock effect.

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