Fitch affirms Estonia

Fitch Ratings said it affirmed the Republic of Estonia's long-term foreign-currency and local-currency issuer default ratings at A and A+ respectively. The country ceiling is affirmed at AA and the short-term foreign-currency issuer default rating is affirmed at F1.

The outlook is stable.

Strong economic growth and real convergence with Western Europe, coupled with the lowest government debt levels in the European Union at just 4% of GDP, underpin Estonia's sovereign ratings, Fitch said.

However, Estonia is showing signs of overheating and the delay in euro adoption adds to risks associated with its rapid bank credit growth, high external debt burden and financing needs, the agency added.

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