According to the experts of the DBRS Morningstar, the stable outlook reflects the assessment that the prudent fiscal policy pursued by Lithuania and the low level of public debt mitigate risks stemming from a challenging geopolitical environment. The Agency’s decision was also driven by Lithuania’s membership of the euro area, a resilient export sector. After recovering this year, Lithuania’s economy is expected to accelerate growth next year, while lower debt levels compared with other euro area countries will provide space to respond where necessary to possible challenges.
“We are pleased with a stable trajectory of credit ratings – maintaining a high credit rating and affirming a stable outlook in a challenging geopolitical environment shows that, despite the challenges, we implement responsible fiscal policy and pursue a sustainable long-term direction of public finances,” Vice-Minister of Finance Darius Sadeckas states.
DBRS Morningstar last changed Lithuania’s long-term credit rating in November 2021 and upgraded it from A to A (high), stable outlook. The latest report by the Agency is available here.
On 18 October, a periodic review of Lithuania’s credit rating was concluded by another international agency, Moody’s Investment Service, which sees Lithuania’s situation as stable. Therefore, the decision was taken to leave the country’s current A2 long-term credit rating unchanged (stable outlook) and to publish the report on Lithuania in the course of the following week’s assessment of the country’s economic outlook.
In their report on the finalisation of the review Moody’s experts highlighted strong public finances and sound fiscal policy of Lithuania. The Agency expects that a strong labour market and public investment will have a positive impact on domestic demand, while external demand will gradually increase. According to analysts, economic indicators of Lithuania may improve at a faster pace than currently projected, which may lead to a more favourable than expected development of general government finances.
Moody’s last upgraded Lithuania’s credit ratings in February 2021, when long-term credit rating A3 (positive outlook) assigned in 2015 was upgraded to A2 (stable outlook).The report by the credit rating agency Moody’s Investment Service is available here.
In May this year, the same high credit rating – A (stable outlook) – was reaffirmed to Lithuania by Fitch Ratings (rated in January 2020). In May, Lithuania’s rating was also reviewed by another credit rating agency S&P Global Ratings by assigning A (stable outlook) and leaving a short-term rating at A-1.
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 is a part of the influential group of credit rating agencies, including Fitch Ratings and S&P Global 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.
