Credit rating agency Fitch lowered the rating of Finland’s central government debt by one grade from AA+ to AA, said the agency in a release on Friday.
Fitch justified its decision by noting that Finland’s general government debt-to-GDP ratio is high and is continuing to grow. Finland’s general government deficit is also set to remain high.
Finland's high government debt remains on an upward trajectory, and the agency does not anticipate sufficient fiscal consolidation to stabilise debt over the medium term.
It expects the general government debt ratio to reach 86.3% of GDP in 2025, up from 82.1% in 2024 and far above the estimated 'AA' median of 49.4%, continuing to rise and surpassing 90% by 2029.
Finland’s outlook is now rated as stable, said the Ministry of Finance in a press release on Saturday.
Finance Minister Riikka Purra in a press release commented that the downgrading of Finland’s credit rating did not come as a surprise. Fitch changed the outlook for Finland’s rating to negative in August of last year.
“Our public finances are in worse shape and our economy is growing more slowly than our peer countries. This puts us on a worrying track. Fitch noted our high level of public spending and does not think the adjustments carried out by the Government are sufficient to stabilise the level of debt. This situation has been developing for a long time, and the measures taken in this government term have not been enough to change course,” Purra said.
Finland’s credit ratings have to date all been on the same grade, but now Fitch’s rating is one grade lower than the others, said the ministry.
Finland also has a credit rating agreement with Moody’s, which has given Finland the second highest rating (Aa1). S&P Global’s rating is also the second highest (AA+). Both agencies have rated Finland’s outlook as stable.
- Finland
- Credit rating
- Downgraded
Source: www.dailyfinland.fi
