Analytics, Economics, Estonia, Rating

"The agency notes in its decisions that Estonian ratings are kept up by strong institutions as well as by the low level of State debt and significant reserves," said the deputy Governor of the Bank of Estonia Märten Ross. He added that according to S&P, the ratings are also maintained by Estonia's competitive, flexible and open economy and by the outlooks to accede to the euro area.

At the end of February, S&P started reviewing Estonia's State ratings according to an extraordinary schedule, refraining from ruling out the possibility that the ratings would be lowered.

"The fact that the review ended with the ratings being kept at the previous level reflects, in the opinion of the agency, the Government's steps taken thus far this year, cutting back this year's budget deficit by 4.6% of GDP," noted Ross.

S&P also noted positively the pre-emptive agreement reached between the Bank of Estonia and the Swedish central bank on 10 billion Swedish krona, which increased the capacity of the Bank of Estonia to guarantee liquidity in the monetary committee system.

S&P explained keeping the State ratings negative with the threats that come from the imbalanced economies of Latvia and Lithuania. The ratings might also in future be affected by delays in accession to the euro area.