Standard & Poor’s upgraded Lithuania’s outlook to stable
The Lithuania’s Ministry of Finance announced that Standard & Poor’s (S&P) Ratings Services has revised its outlook on Lithuania by increasing it from negative to stable. The agency also declared that Lithuania’s Long Term local and foreign currency sovereign credit rating is at BBB and is Short Term rating is at A-3.This increase of ratings is due to the Cabinet’s successful budget cuts and Lithuania’s strong political will to keep its currency stable.
In the press release issued by the S&P its analyst Frank Gill said “The ratings on Lithuania reflect clear commitment across all political parties to support and implement budgetary and structural policies which anchor the currency board regime and enhance the economy’s flexible labor and goods markets”. He also added by saying, “While the resulting unemployment and deflation of nominal income are weighing on tax collection, the process should ultimately result in a stabilization of national income as net exports stimulate growth”.
This fantastic news to Lithuania, which has experienced an unprecedented drop of its GDP in 2009. According to the latest report from the Statistics Department Lithuania’s GDP in 2009 contracted by 15 pct. However, the Lithuanian GDP grew in the last two consequent quarters even though only by 0,1 pct in the last quarter of 2009.