Analytics, Economics, Financial Services, Lithuania, Rating

"The Lithuanian rating reflects the country's strong fiscal situation and a strong external standing, which reflects declining long-term debts since 2018, particularly in the banking sector. The rating is constrained by the low income level and the fact that the gross domestic product (GDP) per capita is among the lowest in the euro area," the international rating agency said in a statement.

According to the press release, no significant political changes should occur after the parliamentary elections of last October, which were victorious for the Lithuanian Farmers and Green Union, and the new government of Prime Minister Saulius Skvernelis should continue seeking to ensure Lithuania's energy independence and raise defense funding.

Nevertheless, the agency noted that the small majority in parliament may mean that the coalition will not last the entire four-year term.

S&P analysts project that Lithuania's economy would grow 2.6% this year, with expected acceleration to 2.8% in three years.

"We think that the GDP will be driven by private consumption and growing investment, which will be boosted by the new EU financial period. We expect the new government to follow the commitments of fiscal discipline and believe that the government's debt will continue declining in the coming year," said S&P.

Lithuania is rated at A3 by Moody's and at A- by Fitch.