Fitch Ratings has reported that Latvia and Estonia face an increased risk of economic recession in the next 12 months, which may put pressure on their credit ratings, according to Bloomberg News.

``The downturn is sharp in Estonia and Latvia and they are at risk of recession, heightening downward pressure on creditworthiness,'' Fitch analyst Eral Yilmaz, said in a statement today.

The economies of Latvia, Estonia and Lithuania, which lie along the eastern shore of the Baltic Sea, are slowing after a credit-led boom following European Union entry in 2004, pushing down property prices and cutting real estate sales. Estonia's economy contracted 1.4% in the second quarter and Latvia's grew 0.2% after the two countries had the fastest growing economies in the EU in 2005.

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