After resignation of Latvian government last Thursday financial groups are not very confident about investing money into Latvian market, since large governmental cuts are mostly likely to be postponed.
Standard&Poor’s have decreased country ranking to ‘BB+/B’ and removes it from CreditWatch negative. Citation from their official release:
“We believe the necessary process of private sector deleveraging is likely to continue over several years, during which time real incomes will decline, testing Latvia’s commitment to both its exchange rate regime and its obligations under the EUR7.5 billion assistance program from the IMF, EU, and other official lenders. The adjustment is made more difficult as external demand for Latvia’s key exports continues to decline.”
Let’s hope that this situation will not go any worse..