S&P Global Ratings affirmed Lithuania’s credit rating
On Friday evening, the international credit rating agency S&P Global Ratings affirmed the long-term credit rating “A” with a stable outlook issued to Lithuania in the past.
Standard & Poor’s agency’s analysts in their publication underline Lithuania’s economy remaining resilient and ready to withstand external factors. The experts hope that Lithuania’s economy will grow at accelerated pace in the upcoming two-three years, and it will help the country’s economy withstand external factors, including global trade tensions, diminished demand on export markets and Russia’s on-going war against Ukraine. A stable outlook also reflects the agency’s expectations that the war will not split over the NATO territory, thus also over the territory of Lithuania.
The agency’s experts highlight that Lithuania’s economy grew 2.8 % last year, and 3.4 % in the first quarter of this year. The growth in 2024 was mainly driven by private consumption, as real earnings increased by 8.5 %. Though wage growth slightly decelerated, this year and next year it will further promote consumption. Decreased investments in the previous year should also recover stimulated by the Recovery and Resilience Facility (RRF), also investments in defence. The analysts note that at the beginning of the year, exports were extremely strong (increased by 8 %) and are of the opinion that exports will keep growing.
Growing defence spending increases general government debt, though, according to Standard & Poor’s agency’s analysts, it is still low (represented 38.2 % of GDP at the end of 2024) as compared to other countries with a similar rating, and external balance remains strong. The experts are of the opinion that Lithuania’s economic structure may further alter towards defence and higher value-added services.
Standard & Poor’s agency’s analysts last reviewed Lithuania’s rating in May 2024 setting “A” (stable outlook) and leaving “A-1” short-term borrowing rating in effect, and in December last year, only published a report for Lithuania assessing the outlook for the country’s economy. The latest agency’s publication is available here.
At the beginning of May, the rating “A” with a stable outlook issued to Lithuania was also affirmed by the international credit agency Fitch Ratings. Lithuania’s credit ratings were last upgraded by the agency in January 2020, when long-term borrowing rating was upgraded from “A-” to “A”.
In the middle of April, the rating issued to Lithuania was affirmed by the international credit rating agency DBRS Morningstar – “A (high)” with a stable outlook, and Moody’s published a report for Lithuania – the agency’s analysts assess Lithuania’s situation as stable, therefore, the decision was made not to change the current country’s rating (A2 with stable outlook).
More information about 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.
S&P Global Ratings is part of a group of three influential credit rating agencies, including Moody’s Investors Service and Fitch Ratings. They use certain classification and symbols to express credit ratings and to determine the credit value for borrowing countries and companies by using standardised credit ratings.