The international credit rating agency, Fitch Ratings, has affirmed Latvia’s long-term issuer default rating at A- with a stable outlook, LSM reports. The agency noted Latvia’s “credible policy framework” and lower government debt than rating peers. However, Latvia had a higher exposure to geopolitical risks, smaller economy, lower GDP per capita, and weaker external finances than peers, Fitch Ratings added. The agency expects Latvia’s general government deficit to increase to around 5% of GDP by 2028 and to decline thereafter, while the general government debt will increase to 52.2% of GDP in 2028. The country’s GDP growth will reach 2.7% in 2026 and an average of 2.4% in 2027-2028, while annual inflation will amount to 3.4% in 2026 and 3.6% in 2027, before declining in 2028, Fitch Ratings forecasts.
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