Credit rating company Fitch has dropped Finland's credit rating from the highest possible AAA to the second-best rating, AA+. The company says that Finland's future economic prospects are nonetheless stable.
Fitch says that Finland's GNP only grew by 0.4 percent last year, the weakest rise in the EU after Greece. The rating company says there are no clear signs that Finland's domestic growth could top an annual growth of 1.0-1.2 percent over the medium term, causing the country's debt development to be feeble.
Fitch estimates Finland's economic growth at exactly 1.0 percent.
Moody's is the only top credit rater that still rates Finland at the highest AAA rating. Standard & Poor's stripped Finland of its top rating in 2014.
Economist: Reforms must be implemented
Banking concern Nordea chief economist Aki Kangasharju says that Fitch's announcement comes as no surprise as Fitch's outlook for Finland's economy were negative to begin with.
Kangasharju interprets the rating dip to mean that Finland's economic growth prospects are "very weak" and that the country has plunged further into public debt.
Kangasharju says that Fitch's decision is a clear message to Finnish society at large to start implementing necessary reforms forthwith.
"Otherwise Moody's will drop its star rating, too," he says.
Finland's government debt interest rate will continue to be low despite the fallen rating, but interest will rise, says Kangasharju, once the European Central Bank ceases to buy out the state loans of Eurozone countries.
"Finland still has a little time to bring about required socioeconomic reforms, but they have to be gotten off the ground right now," Kangasharju says.