S&P boosts Estonia’s rating

TALLINN - The rating agency Standard&Poor’s improved Estonia’s state rating to the level A, maintaining it at a ‘stable’ outlook, reports EPL Online. The head of the monetary policy department of the Bank of Estonia, Ulo Kaasik, stated that the decision is mostly a reflection of the growing confidence in Estonia’s economy, which is attributable to the impending adoption of the euro.

The move also reflects the fact that the private sector and the government sector in Estonia are able, if necessary, to carry out major changes in order to adjust to new situations. Kaasik added, however, that in the future, Estonia will have to continue acting flexibly and guarantee that the government’s budgetary position would improve in accordance to the planned time-frame.

In its decision, S&P noted that Estonia’s accession to the euro area, from 2011, with the elimination of eurozone currency risk, should therefore improve the country’s access to European capital markets. The agency also remarked that Estonia has consistently demonstrated the flexibility of its economy, state finances and of the labor market, which are necessary in order to cope in the context of the monetary union.

According to the rating agency, the stable outlook of the state rating reflects the improvement of the Estonian economy’s competitiveness and the preparedness to decrease dependence on foreign investments.
The last time Standard&Poor’s assessed Estonia’s state rating was in February this year, when the agency raised the ratings outlook from ‘negative’ to ‘stable.’

Moody’s state rating towards Estonia is A1 with a stable outlook while the rating agency Fitch has assessed Estonia’s country rating to be at the level BBB+.