For Estonia, the US credit rating agency Standard&Poor’s has left its evaluation of AA- to the Baltic country’s credit rating unchanged, but has lowered its forecast for the Estonian economic growth from positive to stable, Estonian public broadcaster ERR reports.
According the Estonian Finance Ministry, the agency expected the war to affect Estonia’s economic growth and increase budget spending. More money would have to be spent on defence, alleviating rising household energy bills and on accepting Ukrainian refugees, the agency evaluated.
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Because of Russia’s war in Ukraine, the agency forecasts Estonia’s economic growth to be at 1.8% in 2022. Inflation would also increase more due to high raw material and energy prices. Another factor would be weaker external demand for Estonian goods and services.
In the long term, S&P evaluated, EU funds and favourable macroeconomic indicators would allow the Estonian economy to return to stable growth. The Finance Ministry added that the level of government debt would remain below 18% of GDP over the next three years, ERR reports.
Estonian economic forecast seen as stable by Standard&Poor’s
