Analytics, Estonia, Financial Services, Investments, Rating

Fitch said that public finances are a key rating strength for Estonia – a balanced budget, low government debt and a strong economic policy framework. Banks located in Estonia are well-capitalized, asset quality has improved and the proportion of problem loans has decreased, announced the Ministry of Finance.

As a small open economy, Estonia vulnerable to external shocks, which are related to the main trading partners. Should the confrontation between Russia and the West be sharpened, it can lead to a deterioration of the economic situation, and can be a threat to Estonia's rating.

Estonia's demographic situation was also mentioned as a weakness, i.e. the workforce is shrinking.

The agency raised the assessment of Estonia's economic growth in 2013 from 0.8% to 1.6%. In the current year, Fitch expects about 2% economic growth, rising to 2.4% in 2015 and 2.8% in 2016.