International credit rating agency Moody’s affirmed Latvia’s credit rating at A3 with a stable outlook on Friday, January 16th. The decision was welcomed by Latvian Prime Minister Evika Siliņa, who stated it demonstrates investor confidence in the country’s economic policies.
Latvia’s Credit Rating Affirmed at A3
According to Moody’s, the affirmation reflects Latvia’s solid economic growth foundations and relatively high per capita income.
The stable outlook acknowledges ongoing geopolitical risks, which Moody’s notes are mitigated by Latvia’s NATO membership, the permanent deployment of NATO troops within the country, and strengthening defense capabilities.
The agency anticipates that increases in defense spending, and the resulting impact on public debt relative to GDP, will not significantly harm Latvia’s creditworthiness in the medium term.
Moody’s forecasts an average real growth rate of 1.8% for the Latvian economy between 2025 and 2034. The agency projects a GDP growth rate of 1.7% in 2025, increasing to 2.4% in 2026 and 2.2% in 2027, though these figures are subject to external factors.
General government debt was 46.6% of GDP in 2024 and is forecast to rise to 49.6% in 2026, primarily due to increased defense spending.
Moody’s last affirmed Latvia’s A3 credit rating with a stable outlook on July 25, 2025. Similar assessments of Latvia’s economy have recently been issued by other international ratings agencies.
Rating agencies play a significant role for investors, having worked to regain their influence following criticisms related to their performance during the 2008 sub-prime loan crisis.
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