Moody's improves outlook on Baltics

TALLINN -- Moody's, one of the world's top rating agencies, has improved its outlook on the Baltic States.

The outlook for all three countries was raised from negative to stable. Estonia holds the highest rating of the three countries at A1, making it the only Baltic state with an investment grade rating.

The company praised Estonia for the country's anti-crisis measures and signs of growth last year. It also pointed out that the country is on track to adopt the euro next year. 

Lithuania holds a Baa1 rating while Latvia remains at Baa3. Both are considered junk investments.

Standard and Poor’s and Fitch Ratingshave both made similar changes to their outlooks on the Baltics in the past two months, meaning that every major credit rating agency now considers the three countries to have stabalized.

“The Lithuanian economy has stabilized more quickly than previously anticipated, and also faster than the other Baltic countries,” Kenneth Orchard, a Moody’s analyst, was quoted as saying by Bloomberg.

“the worst of the recession has passed, and the fledgling recovery should support the government’s financial strength and the banking sector. The prospect of a disorderly currency devaluation is now highly unlikely,” he said about Latvia.