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Thursday, 25.04.2024, 09:27
Fitch affirms Estonia's rating at A+
Estonia's ratings are supported by a strong sovereign balance sheet, strong credit fundamentals including governance indicators, and a sound macroeconomic policy framework, the agency said.
The agency said that the Estonian government sector's surplus last year totaled 0.4% of the gross domestic product, and tax revenue was improved by corporate income tax receipts and improvement of indirect tax receipts.
In 2015, the Estonian government sector's debt burden fell below 10% of GDP and the agency expects it to remain on the same level in the next two years. Fitch predicts Estonia's economy to grow 1.8% in 2016 and 2.7% next year. Economic increase is to accelerate as a result of utilization of European Union's new budgetary period's support as well as the improving economic outlook of Estonia's main trade partners.
Demographic trends which might slow down Estonian economy's growth potential if production does not grow still remains Estonia's structural weakness, the agency said. In addition, increasing labor costs reduce Estonian companies' competitive ability.
Fitch expects Estonia's macroeconomic policy framework to endure, and Estonia's finance to remain strong in the medium-long and longer term perspective.