Investor confidence in Latvia has improved because of economic growth and austerity measures, Royal Bank of Scotland Plc said.
The Baltic country plans to sell $2 billion of foreign bonds next year and $3.2 billion in 2014 to cover spending and repay an international bailout loan from 2008, Mohammed Kazmi, a London-based emerging-markets strategist at RBS, wrote today in an e-mailed note.
Latvia’s economy shrunk by almost a quarter in 2008 and 2009 after a property-fueled real estate bubble burst, credit markets froze and its second-biggest bank needed a rescue. The economy grew 5.3 percent from a year earlier from July to September, the ninth consecutive quarter of expansion, as exports and domestic spending advanced.
Growth “is expected to reach 4 percent in 2012, the highest rate in the European Union, which has resulted in strong revenues and has crucially provided the government with room to ease austerity measures,” Kazmi said in the report.
The yield on Latvia’s dollar bond due 2021 fell eight basis points to 3.2457 percent as of 4:41 p.m. in Riga, the capital, data compiled by Bloomberg show. It fell to a low of 3.1911 percent on Oct. 18.
To contact the reporter on this story: Aaron Eglitis in Riga at email@example.com
To contact the editor responsible for this story: Balazs Penz at firstname.lastname@example.org