S&P Upgrades Estonia's Rating to AA
On August 9, Standard & Poor's raised Estonia's credit
rating from A to AA-, a perceived nod to its stringent
In its statement, the agency said that it believes in
"Estonia's strong economic flexibility and improving external
competitiveness against the challenges inherent in adapting the
economy to lessen its reliance on external funds."
Also cited by the fresh rating report were the "clear
commitment of Estonia's political parties to support and
implement budgetary and structural policies to address the
effects of severe economic recession" and low government sector
According to Ülo Kaasik, Deputy Governor of the Bank of
Estonia, the agency's decision first and foremost shows a
growing trust in the country's economy.
"The ongoing Eurozone credit crisis shows once again how
important it is to keep national finances in order. That is
exactly why we need to follow through on our budget strategy
and achieve budget surplus in 2013. In view of the lessons
learned from the recent crisis, we also need to improve the
mechanism of budgetary policies in order to curb the growth of
expenses more efficiently in the future," he said.
According to the Standard & Poor's report, Estonia's growth
in the near future will be mainly driven by growing investments
and a recovery of domestic demand, whereas winding down of the
growth rate of its main trade partners constitutes the greatest
"Growing export performance has helped Estonia recover from a
deep slump. However, we should keep close watch on external
developments, because uncertainty about the future is still
strong. Being a small, open economy, we also need to use the
improved economic situation to replenish our reserves," said
In April 2011, S&P upgraded Estonia's sovereign rating
outlook from stable to positive. Another major credit rating
agency, Fitch, raised Estonia's rating from A to A+ in July.