Latvia’s “A” credit rating has been upheld by S&P Global Ratings (S&P), with a stable outlook, according to the country’s treasury. This decision reflects confidence in Latvia’s economic resilience despite ongoing geopolitical tensions.

The stable outlook hinges on the expectation that the Russia-Ukraine conflict will remain contained within it’s current borders and not extend to North Atlantic Treaty Organization (NATO) members, including Latvia.

S&P anticipates that medium-term risks to Latvia’s financial and economic growth, stemming from regional geopolitical developments, will be offset by a projected cyclical economic recovery. This recovery is expected to gain momentum in 2026, driven by increased demand, a surge in investments, and further easing of monetary policy.

Economic Growth Projections

S&P projects that Latvia’s economy will rebound to 1 percent growth in 2025, following a contraction in 2024. This growth is expected to accelerate and stabilize over the period of 2026-2028, averaging 2.3 percent annually, supported by a cyclical recovery in exports.

“Latvia’s economy will return to 1 percent growth in 2025 following the contraction in 2024.”

The agency also forecasts a general government deficit averaging 3.5 percent of Latvia’s gross domestic product (GDP) between 2025 and 2028.

Previous Assessment

In a previous assessment published on Nov.29, 2024, S&P had already affirmed Latvia’s “A” credit rating with a stable outlook.