Rating agency Standard and Poor's said today it was upgrading its outlook on Latvia from "negative" to "stable," in a move that finance minister Einars Repse said would bolster the recession-hit Baltic state's investment appeal, according to dpa. "We believe that prospects for economic recovery in Latvia are improving given the shrinkage in external imbalances and the government's progress in stabilizing public finances," said a statement issued in London by the rating agency. Despite the highest rate of unemployment in the European Union, at around 22 per cent in December according to Eurostat figures and the prospect of further increases in the jobless total, the agency said it expected the Latvian economy to grow by "just over 1 per cent" in 2010. That figure is notable for being more optimistic than official estimates that the Latvian economy will contract by between 2 and 4 per cent in 2010, following an 18 per cent contraction in 2009. Latvian finance minister Einars Repse, who has introduced a hard-hitting austerity regime, said the ratings upgrade validated his efforts. "The decision confirms that the Latvian government's work has been recognized and that we've taken serious and effective measures," he said. "This assessment is very important to our foreign investors, and the entire international community since it is an important signal confirming Latvia's progress in overcoming the economic crisis," Repse added.
