ESTONIA: Moody’s Affirms Estonia’s A1 Rating

Monday July 24 2017

Moody’s Investors Service, (Moody’s) has on the 21 July 2017, affirmed Estonia’s A1 long-term local and foreign currency issuer ratings. The outlook remains stable.
The factors supporting today’s affirmation are:

• The resilience of Estonia’s economy to external shocks, with economic strength being supported through improving investment prospects;
• The government’s very low debt which, despite budget easing, continues to provide ample fiscal space to withstand a credit shock; and
• The country’s susceptibility to geopolitical event risk.

The stable outlook incorporates Moody’s assumption that Estonia’s strong credit profile, which has largely withstood shocks from weaker growth in Russia (Ba1 stable) and Finland (Aa1 stable), will continue to benefit from the country’s forward-looking economic policies, supporting further income convergence towards the European Union (EU) average. It also reflects Moody’s expectation that a planned fiscal loosening will not risk Estonia’s very prudent fiscal position, which will continue to be among the strongest in their rating universe.

Estonia’s local and foreign currency long-term bond and deposit ceilings remain unchanged at Aaa. The short-term foreign currency bond and deposit ceilings are also unaffected and remain at P-1.

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