Finland Times

In a statement issued on Friday, the agency noted that the risks to the Finnish recovery persist because progress on competitiveness-enhancing measures is slow and external risks remain.

The agency noted however that in 2015 Finland went out of its three-year recession. Weak growth was chiefly supported by slowly growing domestic demand on the back of low oil prices and weak inflationary trends.

The main drags on Finnish economy are unlikely to fade away in medium term. S&P listed them as weak competitiveness, slow growth in trading partners and decline of traditional industries, such as paper and pulp and information and communications technology.

The agency recalled an agreement between labor unions and employer organizations was reached recently on the competitiveness contract.

"Despite the remaining uncertainties, the initial agreement underlines Finland's ability to continue with 'its strongly consensus-based policymaking'," the agency said.

S&P said that after real output growth of 0.4 percent in 2015, it expected growth will average just over 1 percent over 2016-2019. This would mean continued below-average GDP per capita growth compared to peers. The agency saw that reflecting the structural problems of the Finnish economy.

S&P said it could revise the outlook from negative to stable if Finland's exports pick up faster, leading to more rapid output growth, and if the government managed to drive down deficits and stabilize the debt burden earlier than forecast.

There used to be some speculation in Finland that S&P could now go lower than AA plus, which was given in October 2014. Fitch recently lowered Finland to AA plus. The only triple A valid for Finland now is from Moody's.

S&P did not expect the current influx of refugees would have an impact on the economy.

"The ratings on Finland are supported by its wealthy economy, balanced international investment position, and track record of stable, transparent, and effective governance and political institutions," S&P said.