S&P Global Ratings revises Finland’s credit rating outlook to negative

Credit rating agency S&P Global Ratings revised its outlook of Finland’s credit rating to negative and affirmed the rating as AA+. Finland’s rating is the second highest on the scale. Minister of Finance Riikka Purra was not surprised by S&P’s decision.

“Unfortunately, Finland’s figures have made it quite clear that this was coming. Our economic growth has been slower than we expected, and the crisis in the Middle East is the latest bad news,” Minister Purra said.

According to S&P Global Ratings, the negative outlook reflects persistent risks to public finances stemming from low growth, ageing demographics, and rising defence and interest expenditure. There are considerable spending pressures on Finland’s public finances, which limit the effects of the Government’s adjustment measures. The credit rating agency sees a risk that public debt may continue to rise over 2026–2029.

According to the agency, Finnish policymakers must advance adjustment measures and revive economic activity. At the same time, they will have to adapt to the impact that the crisis in the Middle East is having on energy prices.

“The Government has implemented significant growth measures and structural reforms. Naturally, it is a pity that these measures are not having a visible effect at the moment, but they will boost our economy moving forward,” Minister Purra said.

S&P sees Finland’s new fiscal framework as an important anchor over the longer term.

“I am happy that the opposition parties, with the exception of the Left Alliance, have recognised the situation and have joined in agreeing on objectives for the next parliamentary term,” Minister Purra said.

“The fiscal adjustments that will have to be made in the next parliamentary term, which current estimates place at 8–11 billion euros, will be extremely difficult politically for every party. Adjustments of 10 billion euros cannot be made without touching the largest parts of the Budget, such as healthcare, social welfare and social security,” Minister Purra said.

S&P’s next review of Finland in six months

S&P said that it could revise Finland’s outlook to stable if the Government implements further front-loaded measures over the next two years, such that it puts public debt on a clear downward trajectory. The agency’s next review of Finland’s rating will be in October. 
 
Inquiries:
Jussi Lindgren, Economic Policy Adviser to the Minister of Finance, tel. +358 295 530 514, jussi.lindgren(at)gov.fi
Sari Sontag, Senior Ministerial Adviser, tel. +358 295 530 181, sari.sontag(at)gov.fi