Fitch cuts Finland's credit rating amid rising debt
HELSINKI: Finland suffered its first downgrade in almost a decade after Fitch Ratings cut the Nordic country's credit rating over its failure to rein in ballooning debt.
Fitch late last Friday lowered Finland's long-term rating by one level to AA from AA+, the lowest credit grade among the top three rating companies, almost a year after it issued a negative outlook on the debt.
Finland's rating at Fitch is now the third-highest, eight levels above junk.
'Finland's high government debt remains on an upward trajectory, and we do not anticipate sufficient fiscal consolidation to stabilise debt over the medium term,' Fitch said in a statement.
The news comes as the government of Prime Minister Petteri Orpo is attempting to right the course of public finances, which have suffered from consecutive deficits since 2009.
The Cabinet's stated target is to stabilise the debt-to-gross domestic product (GDP) ratio in 2027.
In April, the coalition Cabinet unveiled a €2.3bil (US$2.7bil) package of measures to kickstart growth and investment in the subdued economy.
Lower income and corporate tax rates, as well as a smaller levies on food and medicines, are aimed at boosting purchasing power as the economy gradually recovers from two years of contraction, helped by a series of interest-rate cuts by the European Central Bank.
Underlying the efforts is an unaddressed structural shift in the export-led country's industries. Successive governments have failed to rein in spending to match the loss of income from key industries, including papermaking and consumer electronics.
'Fitch assesses that the measures already decided are insufficient to stabilise the debt ratio over the medium term, given the high level of government spending (57.7% of GDP in 2024) due to ageing-related costs, social spending and increased defence spending,' it said. — Bloomberg
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
5 minutes ago
- The Star
Angola fuel hike protests turn violent, local media report
LUANDA (Reuters) -Protests in Angola's capital over a hike in the price of diesel turned violent on Monday, with local media reporting that several people had been killed and many arrested following looting incidents and clashes with police. The Southern African oil-producing country hiked the diesel price by one-third this month as part of a long-running government drive to curb costly subsidies and shore up public finances. Minibus taxi associations have hiked fares by up to 50% and went on a three-day strike starting Monday. The Novo Jornal newspaper reported on its website that at least three people had been killed in the protests, including a police officer. The police used tear gas and smoke grenades, also firing shots into the air to try to restore calm, Novo Jornal said. The police said in a statement that shops in the capital Luanda had been looted. The statement said police had made arrests but did not give the number. Angola's finance minister told Reuters in October that fuel subsidies amounted to around 4% of economic output last year and that the government would continue removing them in phases. A petrol price hike in 2023 also triggered deadly protests. (Reporting by Miguel Gomes;Writing by Alexander Winning; Editing by Chizu Nomiyama )
BusinessToday
26 minutes ago
- BusinessToday
AI To Unlock Over US$113 Billion for Malaysia, Minister Says
The widespread adoption of artificial intelligence (AI) in Malaysia is poised to accelerate economic growth and unlock up to US$113.4 billion in productive capacity, according to Digital Minister Gobind Singh Deo. Speaking at the High-Level Meeting on Global AI Governance during the World Artificial Intelligence Conference 2025 in Shanghai, Gobind highlighted the transformative potential of Generative AI across industries and underscored Malaysia's commitment to inclusive, responsible and collaborative AI development. 'In this AI-shaped era, collaboration is essential because only through shared commitment, innovation and vigilance can we ensure the digital world remains a force for good,' he said. Gobind added that Malaysia supports the Global AI Governance Action Plan and has taken proactive domestic steps, including the creation of the National AI Office in December to drive and coordinate the country's AI strategy. As ASEAN Chair in 2025, Gobind said Malaysia is spearheading the formation of the ASEAN AI Safety Network, a regional platform to promote responsible AI use, foster research cooperation, develop standards and share best practices among member states. 'AI is not just changing industries; it is accelerating global development. And in doing so, it reminds us that the technologies of tomorrow must be built together, across borders, with a shared vision for a better world,' Gobind said, while sharing that Malaysia will also host two major global AI events this year: The inaugural ASEAN AI Malaysia Summit in August and the Smart Cities World Expo Kuala Lumpur in September, aimed at strengthening international dialogue on innovation and digital transformation. Related
The Star
2 hours ago
- The Star
Trump says he turned down invitation to Epstein's island
A building is seen at Little St. James Island, one of the properties of financier Jeffrey Epstein, near Charlotte Amalie, U.S. Virgin Islands August 17, 2019. REUTERS/Marco Bello/File Photo EDINBURGH, Scotland (Reuters) -U.S. President Donald Trump said on Monday he "never had the privilege" of visiting Jeffrey Epstein's island, saying he turned down an invitation from the convicted sex offender in what the president called a moment of good judgment. Trump's remarks were his latest effort to distance himself from the political furor over his administration's handling of files related to Epstein's case and renewed questions over his past relationship with the disgraced financier, who died by suicide in a New York jail in 2019. "I never had the privilege of going to his island, and I did turn it down," Trump told reporters during a trip to Scotland. "In one of my very good moments, I turned it down." Epstein owned a private island in the U.S. Virgin Islands where he entertained prominent people from politics, business and entertainment. Prosecutors have alleged he used the compound to conceal the sex trafficking and abuse of under-age victims. Trump, who socialized with Epstein in the 1990s and early 2000s, also offered new insight into why their relationship ended. The president said he cut ties after Epstein attempted to recruit staff who worked for Trump. "He hired help. And I said, 'Don't ever do that again.' He stole people that work for me," Trump said. "He did it again. And I threw him out of the place persona non grata." Last week, White House communications director Steven Cheung said Trump had cut ties with Epstein because he regarded him as a "creep." The White House has been under growing pressure from Trump's supporters and political opponents to release more information about the Justice Department's investigation into Epstein. After Attorney General Pam Bondi earlier this year promised to release additional materials related to possible Epstein clients and the circumstances surrounding his death, the Justice Department reversed course this month and issued a memo concluding there was no basis to continue investigating and no evidence of a client list. Those findings sparked an angry outcry from some of Trump's supporters who have long believed the government was covering up Epstein's ties to the rich and powerful. Trump's efforts to deflect attention from the case have so far faltered. On Monday, the president again called the story "a hoax." "It's a hoax that's been built up way beyond proportion," Trump said, saying Democrats controlled the Epstein files for several years and would have used them against him during the last presidential election if there was anything in them. Trump flew with Epstein aboard his plane at least six times, according to logs for flights spanning from 1991 through 2005. None of those trips were to Epstein's private island. Trump has denied ever being on the plane and has not been accused of any wrongdoing. (Reporting by Andrea Shalal in Edinburgh, Scotland and Nandita Bose in Washington, Additional reporting by Andrew MacAskill and Luc Cohen; Editing by Colleen Jenkins and Cynthia Osterman)
