The credit rating company Moody's estimates that the treatment and aging of the coronavirus pandemic will increase Finland's credit challenges. The company has updated its assessment and expects the economy to shrink and Finland to become more indebted than previously expected.
Moody's has kept Finland's credit rating unchanged at Aa1 with a stable outlook. It justifies its assessment published yesterday today.
Moody's has updated its assessment of the development of the Finnish economy. Now it forecasts Finland's GDP to shrink by 6.5 per cent this year, when at the beginning of April it still forecast a decline of only about four per cent.
Next year, the company expects the Finnish economy to recover by 3.1 per cent.
Fiscal debt was 59.4 percent of GDP last year, but Moody`s expects it to rise to 70.1 percent this year and 72.8 percent next year. The debt estimate has risen by five percentage points in a couple of months.
The aging of the population and the relatively weak economic growth that seems to be weakening weaken Finland's long-term outlook.
On the other hand, according to the classifier, the credit profile is underpinned by a strong institutional framework that has supported the improvement in tax and debt indicators in recent years. It also considers Finland's strength to be the information society and a skilled workforce.