The credit rating agency Moody's downgraded Finland's long-term issuer and senior unsecured debt ratings from the best AAA to AA1, the agency announced on Friday night.
However, the rating outlook was changed from negative to stable. Moody's said two key drivers lowered the Finnish government bond ratings to AA1. One was the weak growth of the Finnish economy in the near future, which reduces Finland's resistance to economic shocks. The other was the country's deteriorating fiscal position.
The agency expected that in the next five years no any reversal in the upward trend of public debt burden would be seen. The stable outlook has been, according to Moody's, attributed to "the government's commitment to structural reforms and fiscal consolidation, which mitigates the risk of further deterioration in the country's economic strength and the government's balance sheet."
The agency said that Finland's long-term and short-term foreign-currency bond remained unchanged at AAA, and the country's long-term local-currency bond and deposit ceilings maintained at AAA.
So far, all the three major international rating agencies have downgraded ratings for Finland from the best triple A. In addition to Moody's, Standard & Poor's reduced its rating for Finland from AAA to AA+ in October 2014; and Fitch lowered the rating from AAA to AA+ in March this year.
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