Moody's raises Latvia outlook

RIGA -- International ratings agency Moody's has raised Latvia's outlook despite political turmoil that shook the country when President Valdis Zatlers dissolved parliament.

"At the moment, my main task is to ensure that political instability caused by the president's proposal to dissolve parliament does not have any significant impact on Latvia's return to international financial markets," prime minister Valdis Dombrovskis was quoted as saying by national news agency LETA.

"I am sure that we can expect positive decisions from other international credit rating agencies as well, which will boost attraction of investments to Latvia," he said.

Moody's raised its outlook on Latvia to positive from stable and reaffirmed the country's rating at Baa3 -- just one level above junk.

According to the IMF Latvia has been the hardest hit country in the world by the economic crisis, with the economy contracting by about 1/4 in two years.