Moody's: euro boost for Estonia

In its new report on Estonia, Moody's Investors Service said the country's A1 government bond ratings with a stable outlook have received an additional boost with the upcoming adoption of the euro.

Estonia's economy is small by global standards, Moody's said, and is increasingly very open, which has made it vulnerable to significant economic volatility over the past 10 years.

Despite its small size, however, the agency said it believes that the Estonian economy has some important structural strengths that should sustain above-average growth over the medium term.

Low labor costs, combined with a more stable macro environment, should promote higher investment rates, which would allow long-term potential GDP growth to be about 2 to 3 percentage points per year above average, Moody's said.

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