Estonia economic outlook better than US - S&P's

  • 2011-04-27
  • TBT Staff

Estonia's switchover to the euro is one of the main reasons that S&P's improved the country's outlook.

TALLINN -- In a landmark move, Standard and Poor's ratings agency has given Estonia a better economic outlook than the United States.

S&P's upgraded Estonia's outlook to "positive" just days after downgrading the US to "negative". The agency still maintains a stronger credit rating for the world superpower, however, at 'AAA' compared to Estonia's 'A'.

The agency cited Estonia's successful accession into the eurozone at the beginning of this year as one of the main reasons for the upgrade. Other helpful factors included it's low foreign debt and the country's strict budgetary discipline.

The news comes alongside another major indicator providing a boost to economic confidence in the country -- recent data shows that Estonia was the only country in Europe to register a budget surplus last year.

Last year's surplus amounted to 0.1 percent of GDP, largely due to the sale of pollution credits, state-run news agency ERR reported. No other EU country ended the year with a positive balance sheet.

Estonia's budget is expected to return to a deficit this year and remain in the red until around 2015.

Standard and Poor's is a US-based credit ratings agency. It is one of the "Big Three" along with "Moody's" and "Fitch".