Finland Times

 

Chief Economist of Aktia Anssi Rantala. File Photo Lehtikuva

Fitch and other international rating agencies have amazingly strong confidence in the Finnish economy and the political leadership's ability to renew it, believes Aktia's chief economist Anssi Rantala.

 

“Let's hope the raters are right to be confident,” Rantala said.

 

Fitch announced last night that it still holds Finland to its highest rating, AAA.

 

Rantala believes that Finland's traditionally good reputation and strong institutions are still reflected in the raters' and investors' estimates. Another key rating agency Moody's downgraded France's rating yesterday to AA2, but in Rantala's view, Finland is not in significantly better shape.

 

“When I look at Finland and France, I see an awful big difference in economy dynamics. I have been worried about the direction of the Finnish economy for many years.”

 

Fitch drew attention in its assessment to the fact that Finland's public debt relative to GDP is not very high in comparison with other European countries. However, Rantala believes it is noteworthy that the debt is growing at a rapid pace, and there is no refraction of growth in sight.

 

In his opinion, it is somewhat paradoxical that the Finnish pension system is considered a strong basis for a high classification.

 

“A surplus of pension companies will not help fund other public finances.”

 

Classifications and their changes do not have a great effect on Finland's interest payments, because the interest rates are low, and the European Central Bank's purchase program creates a demand for European countries' government bonds.

 

Fitch says that Finland's rating can fall, if the economy gets stuck at a low level, which would worsen the public deficit.