Moody’s Investors Service to raise the credit ratings outlook for Latvia and Lithuania, as their economies recovered faster than expected. Baa1 rating to the prospect of Lithuania was upgraded to stable from negative, and also that of Latvia, but rating Baa3. Credit rating agencies increase the prospects for regional stability signals and actions of governments to address the budget deficit. Over the past two months by Standard and Poor’s and Fitch Ratings raised its outlook for Estonia, Latvia and Lithuania stable from negative. “The Lithuanian economy is stabilized faster than expected and those of other Baltic countries,” said Kenneth Orchard, an analyst at Moody’s. According to him the recession ended in the third quarter of last year and this will have a moderate positive effect on the finances of the Government, expressed in a smaller budget deficit and slower growth of debt. In Latvia, the “worst of the recession has passed and will support the restoration of Finance of the Government and the banking sector,” said Orchard. “The prospect of a disorderly devaluation of the currency is now unlikely.” Latvia requested assistance from the EU and the International Monetary Fund amounting to 7.5 billion in 2008, having acquired its second largest bank. In the fourth quarter of the country’s economy contracted by 16.9 per cent.
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