Moody's said in its recent report that immigration into Estonia, which has been a net positive since 2015, has contributed to economic development, supporting labor supply and growth potential.

Moody's, one of the big three ratings agencies together with Standard and Poor's (S&P) and Fitch, says that Estonia's relative economic resilience through the pandemic so far, and good growth prospects after it ends, have been factors in maintaining the current rating, while the country's debt and creditworthiness indicators are among the best of those states which Moody's assesses.

Similarly, Estonia's downturn in 2020 was among the mildest across the EU, Moody's notes, helped by the fact that the economies of its main trading partners also saw less harsh contractions than others, while exports from Estonia rose on year in the second half of 2020 despite the pandemic.

The ICT and financial services sectors also saw growth last year.

Moody's: Estonia has performed well in pandemic

Moody's says it does not plan to revise Estonia's growth prospects for the coming years given Estonia's economic performance in the pandemic so far.

Despite uncertain economic outlook relating to the continuing crisis, Moody's forecasts economic growth of 2.7 percent for Estonia by the end of this year, with an average of 3.5 percent for the next few years, while the country's debt burden is forecast to stabilize from 2021 onwards, Moody's says.

Other factors which could have an upwards effect on the Moody's rating include an improvement in geopolitical risks in the region, and structural changes towards more higher value-added sectors.

Conversely a rise in geopolitical or domestic political risks would prompt a downgrade.

Moody's has retained its A1 rating for Estonia for several years already. Last year, but early on in the pandemic, Fitch kept its AA- with a stable outlook rating for Estonia, while on the eve of the coronavirus reaching Estonia, S&P kept its long-term sovereign rating at AA-high, and raised its outlook from stable to positive.

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