Standard and Poor's on Friday downgraded Finland's outlook to "negative," putting a crack in the credit image of one of the few countries to hold the top-notch "AAA" rating. Prior to that, Finland was the only eurozone country to hold both the prized "triple A" rating and a stable outlook from all three ratings agencies - S&P, Fitch and Moody's.
Finland has long prided itself for having extremely strict fiscal management that has allowed it to avoid ever breaking EU fiscal rules.
But S&P said a persistent sub-par growth rate was reflective of "deep structural demographic and economic imbalances that hamper the government's efforts to achieve fiscal consolidation."
"The outlook revision reflects our view of Finland's protracted economic stagnation, with average GDP per capita growth over the past decade of close to zero," it said. It said it now expected gross domestic product in 2013 to have contracted by 1.4 percent, rather than the 0.5 percent it was forecasting during its last Finland review in October.
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