🇫🇮 Fitch downgrades Finland’s credit rating

On Friday 25 July, the Fitch credit rating agency lowered the rating of Finland’s central government debt by one grade from AA+ to AA. Finland’s outlook is now rated as stable.

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.

Minister of Finance Riikka Purra 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.

Further adjustments needed

“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.

Purra has been calling attention to the poor state of public finances for a long time.

“In my June press conference, I said that public finances will need to be further adjusted by about one billion euros. I plan to bring up the need to strengthen public finances once again in the upcoming budget negotiations. We cannot put off further adjustments. Adjustments will also have to continue over several government terms before the debt ratio begins to decline.”

Fitch’s rating one grade below other ratings

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. 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.

Inquiries:
Jussi Lindgren, Economic Policy Adviser to the Minister of Finance, tel. +358 50 576 4611, jussi.lindgren(at)gov.fi
Sari Sontag, Senior Ministerial Adviser, tel. +358 295 530 181, sari.sontag(at)gov.fi

Originally published on 26 July by Ministry of Finance Finland.

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