FINLAND has received yet another warming about population ageing and growing household debt.
DBRS, a credit rating agency headquartered in Toronto, Canada, on Friday stated that population ageing and the shrinking of the working-age population are putting pressure on the public economy, representing a major medium-term challenge for Finland.
The high level of household debt was another source of concern for the credit rating agency. “The high debt level and substantial portion of mortgages with variable interest rates increase the vulnerability of the household sector to shocks, especially when considering rapid increases in interest rates or income shocks,” it said.
Overall, however, the economic risks are modest in Finland, according to DBRS.
The credit rating agency also revealed it is monitoring the ongoing government formation process calmly and expressed its confidence in the successful completion of the process under the leadership of Antti Rinne, the chairperson of the Social Democrats.
A government led by the leftist party, it gauged, could revive the social and health care reform, but reduce the participation of private service providers, and possibly seek to change education and labour market policies.
“However, DBRS does not foresee significant changes to the government’s commitment to prudent policy making,” it said, affirming its AA rating and stable outlook for Finland.
Aleksi Teivainen – HT
Source: Uusi Suomi