[ad_1]
Since 2009 Lithuania has diversified its economic structure and increased its economic resilience. 2019 The country’s GDP growth was one of the highest in the euro area at 3.9 percent. The positive development of the balance of the general government in recent years and the accumulated financial reserves have provided fiscal space, which has allowed the implementation of measures to mitigate the negative effects of COVID-19 on the economy. However, economic activity suspended due to this year’s pandemic will still lead to a decrease in GDP, an increase in the deficit and public debt.
DBRS Morningstar had last improved Lithuania’s debt rating outlook this year. January: from stable to positive. COVID-19 has recently revised and changed the credit rating outlook for most countries.
Credit ratings can be lowered if the current crisis leads to higher-than-expected macroeconomic imbalances and if the public debt / GDP ratio cannot be contained in the long term. Consequently, the improvement can be driven by effective fiscal policies that mitigate the negative effects of a pandemic and ensure long-term sustainable finances.
Another international credit rating agency, Moody’s, gave Lithuania a long-term debt rating of A3 (positive outlook), Standard & Poor’s (S&P) – A (stable outlook) and Fitch – A- (positive outlook).
[ad_2]
