HELSINKI: Finland may lose its Fitch rating due to rising debt and stagnation. The northernmost euro member’s long-term AAA rating was reduced to negative from stable, while the statement affirmed issued by the Fitch that the top rating, slow economic growth and mounting debt could lead to a cut.
Finland’s government has allowed public debt to double since 2008 as economic growth proved elusive. It’s also missed all its key economic goals over the past four years and this month oversaw the collapse of a key health-care overhaul.
“Our population is aging, which weakens potential economic growth,” Finance Minister Antti Rinne said in an interview Saturday on YLE TV1. “We also have a structural problem with exports; we now need export-led economic growth. To restore the balance in public finances, we also need to cut spending and increase revenue.”
Standard & Poor’s cut Finland’s top rating by one level in October, citing the prospect of protracted stagnation, while Moody’s Investors Service has the Nordic nation at its highest Aaa level. Fitch reduced its forecast for Finnish growth to 0.5 percent this year from 1.1 percent and said growth will accelerate to 1.3 percent next year. Germany and Luxembourg have the highest rating at Fitch, Moody’s and S&P.
