“Standard & Poor’s” kept Lithuania’s ratings intact
Posted by editor on 8/18/09 • Categorized as Business, Economy Watch, Finance • 
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The “Standard & Poor’s” on 18 August has kept Lithuania’s long-term sovereign foreign currency credit rating untouched, which is BBB, vz.lt quoted the Reuters. A week earlier the agency has warned that it will further cut Lithuania’s credit rating. It is stated that the agency based its decision to keep the rating intact due to the Government’s attempts to put in order its public finances.
“The removal of the CreditWatch placement reflects the Lithuanian authorities’ commitment to take sufficient measures to rein in the deterioration in the public finances, including measures to stem the widening deficit of the social funds budget,” Standard & Poor’s credit analyst Frank Gill said in a statement quoted by the BNS.
“Supplementary rounds of budgetary consolidation, alongside the rapid rebalancing of the economy, will narrow Lithuania’s external financing needs over the next several years, and should improve the underlying structure of the economy,” according to the statement.
The agency also reminded about decreasing wages and fall of prices in 2009, and acknowledged that in comprising to its neighbours Lithuania’s economy is very flexible.
“The ongoing downward adjustment of Lithuanian producers’ cost structures should over the medium-term lay the foundations for a restoration of competitiveness,” it said.
However, the agency pointed out few shortcomings to the Lithuania’s outlook, one of them being that Lithuania’s 40 percent exports are directed to the Baltic States and the Commonwealth of Independent States. It also stated that a devaluation of the key trading partners would further worsen Lithuania’s export perspectives.
Last week the S&P has cut the long-term sovereign foreign currency credit rating for Estonia and Latvia.
(No Ratings Yet)
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