Moody's changed the outlook on Estonia's ratings to negative

Postitatud:

07.11.2008

According to the press release published today, 7 November, the rating agency Moody's decided to downgrade the outlook on the Estonian sovereign rating to negative from stable with the rating itself remaining at A1.

"Moody's decision reflects the negative attitudes prevailing in the global market, including towards the Baltic States. The agency highlights as Estonia's strengths the integration of our banking system with the Nordic countries and the government's strong financial position, noting, however, that if the economic downturn is more severe than expected, the government's reserves will last only for a limited number of years," commented Deputy Governor of Eesti Pank Andres Sutt.

"The rating agency's assessment of the risks to the Estonian economy makes the adoption of the euro even more important and stresses the significance of purposeful action in achieving this goal. Meeting the inflation criterion is supported by the downturn of both the Estonian and the global economy. At the same time, keeping the budget deficit within the limits prescribed in the criterion requires decisive cuts and postponement of expenditure over the next two years. To maintain Estonia's credibility, these choices must be made as quickly as possible," Sutt stressed.

The last time Moody's provided their assessment to Estonia was in September 2008, when the country's rating was affirmed at A1 stable. At the end of October, Standard & Poor's affirmed Estonia's sovereign rating at A negative. Fitch Ratings revised Estonia's sovereign rating down to A- negative at the beginning of October 2008.