S&P lowers Lithuania view to negative

S&P said it changed its outlook for Lithuania to negative from stable and affirmed its A+ long-term foreign-and local-currency sovereign credit ratings.

“The negative outlook reflects our view that a more protracted and less predictable conflict between Russia and Ukraine could impose higher economic and security costs on Lithuania's small, open economy, leading to worsening fiscal, external and monetary metrics,” the agency said in a press release.

S&P warned it predicts Lithuania’s economy will slip into recession in first-half 2023 before recovering in the second half and growing only 0.5% annually. In the euro area, only Estonia’s inflation is higher than Lithuania’s.

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