The agency also affirmed the country’s BBB long-term foreign and local currency sovereign credit rating. The outlook is stable.
According to the agency, the ratings reflect a proven political commitment to sound economic and fiscal policies and the country’s moderate external indebtedness.
Lithuania’s economic growth slowed down to 3 percent in the first half of this year due to weaker-than-expected external demand.
The agency believes that investments in tradable sectors as well as improving domestic consumption will be the main growth drivers.
According to the agency, Lithuania’s government has made significant progress in consolidating the country's public finances. However, the agency believes that the final budget deficit in 2012 might be marginally higher than the target of 3 percent of GDP since the central government net borrowing calculated on a cash basis in the first half has already accounted for about 2.4 percent of the GDP projected for 2012. Hence an improvement on last year’s deficit over the same period is only marginal, the agency said in a press release.
