Fitch changes outlook for Finland to positive
04 Aug 2018, 22:10
The credit rating agency Fitch Ratings early Saturday changed Finland's outlook from "stable" to "positive", but kept its long-term issuer default rating at AA+.
There had been cautious expectations in Finland that the rating could possible be restored to AAA.
Finland lost the highest slot in all the three leading western credit agencies between 2014 and 2016.
In its report now, Fitch noted that the medium-range possibilities for growth have improved in Finland and the 2017 societal pact on improving the competitive edge may increase the possibilities further.
In Finnish reactions, Jan von Gerich, the main strategist for the Nordea Bank said on Saturday that Finland is now "a step closer to returning to the "triple-A club". Von Gerich was quoted by the business daily Kauppalehti as underlining, however, that the positive track requires that also the next government continue with the current fiscal policies and not agree to major budget increases.
Also Fitch noted in its report that the direction of policies after next May's parliamentary elections in Finland is uncertain, but says that the dependence in the formation of the post election coalition on centrist parties is likely to secure the continuation of present policies.
The Finish coalition government of the center, the conservatives and the populist Blue Future has curbed public spending and reduced some societal benefits.
In the polls now the opposition social democrats are leading followed by the conservatives. The social democrats have criticized the government policies and pledged measures such as an increase in the pensions.
The Finnish credit rating began its drop from from AAA in October 2014, when S&P reduced Finland to AA+.
It was followed by Fitch in March 2016 and by Moody's in June 2016.
Now Fitch was the first to improve the outlook albeit not the rating.