EE: Moody's affirms Estonia at A1/Stable.

By bne IntelliNews July 27, 2012
Moody's Investors Service affirmed Estonia's rating at investment-grade A1 with Stable outlook. Agency noted Estonia's strong financial position and ability to carry through conservative budgetary policies under tough economic conditions. Moody's also noted 2011 budget balance by posting a 1% of GDP surplus when a 1.6% of GDP deficit was expected, as well as highers in the eurozone GDP growth of 7.6% in 2011. In the beginning of June 2012 Fitch Ratings affirmed Estonia's sovereign credit rating at A+, outlook Stable. Agency commented that Estonia represents the economy that successfully joined the eurozone and recovered after the crisis. Estonia's flexibility and effective state governance stand out, while financial infrastructure remains one of the strongest in eurozone as seen by CA surplus and constantly declining private sector debt burden. Fitch sees past volatility and comparably low income as risks to the economy, but believes that Estonia is much more resistant to external shocks than in 2008-2009 due to increased competitiveness. To remind, in January 2012 Standards & Poor's affirmed Estonia's rating at AA-, while setting outlook at Negative. Negative outlook is to be attributed to the ongoing debt crisis in Europe. Estonia's AA- rating is supported by stable environment, public spending control, low debt burden, flexible private sector, all of the factors helping to effectively manage the negative external environment, S&P's believes.

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