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Rating Agency Moody’s Shows Confidence in the New Government – After Six Years It Upgrades Lithuania’s Long-Term Credit Rating, While Standard & Poor’s − Affirms the Tenable A+

Date

2021 02 21

Rating
0
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The international credit rating agency Moody’s Investment Service has upgraded Lithuania’s A3 (positive outlook) long-term borrowing rating to A2 (stable outlook) in 2015. Another credit rating agency S&P Global Ratings has affirmed the A+ long-term borrowing rating previously granted to Lithuania and maintained a stable outlook.

“We are pleased that these international credit rating agencies have assessed the resilience of Lithuania’s economy to shock and preparation to overcome the Covid-19 pandemic. This is an important evaluation that demonstrates confidence in the policy pursued by the Lithuanian Government. Definitely, it is also the responsibility to ensure further a sustainable financial policy," says Minister of Finance Gintarė Skaistė.

The decision of the experts of Moody’s agency regarding the upgrading of Lithuania’s rating was due to two main reasons. In particular, the medium-term positive outlook for Lithuania’s economic growth driven by increased investment of the EU assistance, structural reforms oriented to productivity growth and improved migration and demographic trends. In addition, the agency expects that, despite the impact of the crisis, the debt burden of Lithuania will remain lower than in most countries with the same (A2) credit rating, while the fiscal situation will be further strengthened by low debt service costs and a decline in foreign currency debt.

S&P Global Ratings has affirmed a high long-term borrowing rating by welcoming expectations regarding the country’s rapid recovery from the pandemic and the improved foreign balance of payments. The monetary policy of the European Central Bank has also been taken into account, which will make it easier for the countries to survive temporary fiscal deterioration over the next few years.

The report of the rating agency Moody’s is available  here, and of S&P Global Ratings – here

The international credit rating agency Fitch Ratings has awarded Lithuania a long-term borrowing rating A (stable outlook), DBRS Morningstar – A (stable outlook).

 

Additional information:

A credit rating is an indicator providing investors (creditors) with concise information on the potential 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.

Moody's Investor Service and S&P Global Ratings companies belong to the influential group of credit rating agencies, such as Fitch Ratings. For credit ratings the companies use particular grades and symbols, and set a credit value to borrowing countries and companies by using standardized credit ratings.