DBRS confirms Estonia at AA(low)

DBRS said it confirmed the Republic of Estonia’s long-term foreign and local currency issuer ratings of AA (low) and short-term foreign and local currency issuer ratings of R-1 (middle).

The trend is stable.

DBRS said the AA (low) rating and stable trends are underpinned by Estonia’s membership in the European Union and the euro area, its stable macroeconomic policy framework and strong sovereign balance sheet.

The European Commission expects general government gross debt of 8.5% of GDP in 2019, the lowest public debt in the euro zone, DBRS said in a news release.

Nevertheless, DBRS said its ratings are constrained by structural challenges, including Estonia’s small and open economy’s vulnerability to external shocks and rising labor costs that could weaken the country’s export pricing competitiveness.

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