Finland Times

 

Photo AFP-Lehtikuva.

International credit rating agency Standard & Poor's lowered its long standing triple A (AAA) credit rating on Finland to AA+ on Friday.

 

The rating agency cited weak economic growth prospects as the reason for the cut in Finland' credit rating.

 

According to Standard & Poor's, the rating is likely to remain for the next two years.

 

Credit assessment are considered to be a significant factor when markets evaluate the interest rate of the government's bonds.

 

Antti Rinne, the Minister of Finance said the decision to cut the country's credit rating is unfortunate but was not unexpected. "The reasons are known and measures have already been taken." said the minister. However the decision does not necessitate the need to re-evaluate the economic policy. Still, the minister emphasised the need to spur new growth.

 

Photo AFP-Lehtikuva.

Nordea economist Pasi Sorjonen said the lowering of credit rating does not pose a significant increase in the interest expense.

 

Prime Minister Alexander Stubb in a tweeter feed said the significance of the rating shows that there is a lot of work to be done in the country.

 

According to the rating agency, the Finnish economy has been hampered for a long time due to aging population, shrinking workforce and the weakening of domestic demand.

 

On the positive side, the rating agency sees Finland as an innovative economy with an efficient state system.

 

Finland holds the triple A (AAA) status from Moody’s and Fitch.