Moody’s Investment Service assesses Lithuania’s economic outlook
On Tuesday evening, international credit rating agency Moody’s Investment Service published a report on Lithuania, assessing the country’s economic outlook. It highlights the country’s strong public finances, fiscal policy and growing economy.
Moody’s completed its periodic review of Lithuania’s credit rating on 3 April . The agency’s analysts assess the situation of Lithuania as stable, therefore, it was decided to make no changes in the country’s current ‘A2’ long-term credit rating (stable outlook) and to publish only a report on Lithuania, assessing the country’s economic prospects.
In the report, Moody’s experts emphasized the country’s strong public finances, small but flexible and diversified economy, and reliable institutions. Among the advantages of Lithuania’s credit, analysts highlighted a small, albeit increasing, general government debt, which will remain one of the lowest among countries with a similar rating, as well as strong fiscal governance and the strength and flexibility of the Lithuanian economy, which has been demonstrated in the face of previous economic shocks. The main risk remains geopolitical, due to the neighbourhood with Russia.
Experts believe that the budget deficit will grow in the next few years due to increasing defence spending, while the Lithuanian economy will remain strong due to domestic demand - this year, real GDP growth is expected to be 2.8 %, and next year – 2.5 %. Experts note that although part of defence purchases will be imported, increased defence spending may benefit local industry (Moody's in its report singles out Rheinmetall's project to produce artillery ammunition). The Lithuanian economy will also benefit from a secure energy supply (synchronization with the continental European power grids, disconnecting from BRELL).
Last Friday, Lithuania’s rating of ‘A (high)’ with a stable outlook was affirmed by the international credit rating agency DBRS Morningstar, and last November, Fitch Ratings reaffirmed the country’s rating of ‘A’ with a stable outlook. Meanwhile, S&P Global Ratings published a report on Lithuania in this December, where it assessed the country's economic prospects. The last time analysts of Standard & Poor's agency reviewed Lithuania's rating was in May 2024, setting it at ‘A’ (stable outlook) and leaving the ‘A-1’ short-term credit rating in effect.
Moody's last upgraded Lithuania's credit ratings in February 2021, when the long-term credit rating of A3 (positive outlook) granted in 2015 was raised to A2 (stable outlook). The full statement from the credit rating agency Moody's can be found here.
More information on Lithuania’s credit ratings is available here.
Additional information:
A credit rating is an indicator that provides investors/creditors with consolidated information on the level of the borrower’s ability to meet its financial obligations. A high credit rating indicates a lower risk of default of the borrower/issuer and, accordingly, lower borrowing costs.
Moody's Investors Service is part of a group of three largest credit rating agencies, including Fitch Ratings and S&P Global Ratings. 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: 22-04-2025
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