RIGA, Nov. 29 (Xinhua) -- S&P Global Ratings ("S&P") has maintained Latvia's credit rating at "A" with a stable outlook, according to an update released on Friday.
The Finance Ministry said the stable assessment reflects the Latvian government's continued adherence to a strict fiscal policy, keeping the state budget deficit and debt under control despite a planned increase in national defence spending during 2026-2027.
According to the rating agency, Latvia's general deficit, including an increase of defence spending to 5 percent of gross domestic product (GDP) by 2026, will average 3.8 percent of GDP annually from 2026 to 2028.
The agency expects the economy to grow by 1.5 percent in real terms this year and by 2.5 percent annually in 2026-2028, driven mainly by improved absorption of European Union funds in 2026 and public investments in infrastructure, security, and defence.
While the Latvian economy has been resilient to the initial impact of the Russia-Ukraine conflict, S&P warned that the protracted war poses challenges to the country's medium-term growth. It also noted that Latvia's location on NATO's eastern flank means security risks will hardly decrease even after the war ends.
Latvia's credit rating has stayed at the "A" level since S&P's previous review in May 2025. ■
