Fitch affirms Estonia's A+ rating ({{commentsTotal}})

Fitch Ratings headquarters in New York.
Fitch Ratings headquarters in New York. Source: (Reuters/Scanpix)

Fitch Ratings, one of the "Big Three" credit rating agencies, on Friday affirmed Estonia's long-term foreign and local currency issuer default ratings (IDR) at A+, with the outlook stable.

Estonia's sovereign ratings are supported by a strong sovereign balance sheet, a sound macroeconomic policy framework, eurozone membership, and healthy governance indicators in comparison with rated peers, the Estonian Ministry of Finance said.

Fitch projects economic growth to accelerate to 2.3 percent and 2.8 percent in 2017 and 2018, respectively, due to higher growth in key trade partners, sustained private consumption and stronger public investment driven in part by higher execution of EU structural funds.

Estonia's general government debt fell to 9.5 percent of the GDP at end of 2016, which according to Fitch is less than one fifth of the peer median. The government's net financial asset position is solid at 43.5 percent of the GDP; this includes liquid assets equal to 5.2 percent of  the GDP.  

The rating agency evaluated Estonian banks' asset quality and capitalization to be sound.

Fitch estimated sustained strong economic growth without excessive imbalances and narrowing the gap in incomes per head between Estonia and the AA median to trigger positive rating action. Risk factors which could trigger negative rating action include economic or financial shocks that adversely affect Estonia's macroeconomic and financial stability.

Editor: Aili Vahtla

Source: BNS

Siim Kallas.

Interview: Siim Kallas on ambitions, Estonian politics, and EU presidency

Following the local elections in October this year, Reform Party founder, former prime minister, EU commissioner, and presidential candidate Siim Kallas took on the job of municipal mayor of Viimsi, a community on the outskirts of Tallinn. In his interview with ERR's Toomas Sildam, Kallas talks about local government, his party, the EU presidency, and perspectives in Estonian politics.

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