"Standard & Poor's Ratings Services cut Finland's triple-A rating one notch to AA-plus, citing the Nordic country's continuing economic problems.
The outlook is stable, however, S&P said.
The rating firm had earlier indicated a possible rating downgrade, warning in April that it could strip the triple-A rating within the next two years unless "clear signs emerge that Finland's negative economic and fiscal debt trends are being reversed."
The nation, which once enjoyed robust economic growth, has been struggling to recover from the 2008 financial crisis. Its economy has lagged behind peers, with gross domestic product per capita shrinking by about 0.26 per cent, "well below" the norm for comparable economies, the rating firm said. And the country's budget deficit in 2015 is expected to violate the European Union's budget rules, Martti Hetemaki, permanent secretary of Finland's Ministry of Finance, said in August.
On 10 October, S&P also warned of Finland's vulnerability to Russia, which accounts for about one-tenth of total exports, or about 4 per cent of country's GDP. It said it expects Finland to post its third consecutive year of negative real GDP growth, as real output remains about 6 per cent below its 2008 level. Further, the rating firm said, Finnish exports have underperformed world trade since 2008, an indicator of lower competitiveness...
...Despite weak economic performance, the rating firm noted, the country's labour costs, based on Eurostat data, have risen above those of the euro zone.
S&P further warned the country's aging population, shrinking workforce and loss of global market share in the key information technology sector will pose further challenges in its recovery..."
The Wall Street Journal 10 October. Maria Armental
LEHTIKUVA / ERIC PIERMONT