HELSINKI, Oct 10 (Reuters) - Finland on Friday dropped out of the small group of euro nations with top credit ratings as Standard & Poor’s cut its rating to ‘AA+’ from ‘AAA’, citing persistent economic growth problems.
Finland has yet to return to its 2008 gross domestic product levels after exports dwindled due to the euro zone crisis, problems at its mobile phone and paper industries and the crisis over Ukraine.
The economy is widely expected to shrink for third consecutive year in 2014 and to show minor recovery in 2015.
“The downgrade reflects our view of the risk that the Finnish economy could experience protracted stagnation because of its aging population and shrinking workforce, weakening external demand, loss of global market share in the key information technology sector, structural retrenchment of the important forestry sector, and relatively rigid labor market,” S&P said in its report.
Following the cut, Germany and Luxembourg are the only euro states with a full set of top-grade ratings from all three main rating agencies.
“This is an unpleasant decision. It wasn’t, however, unexpected or dramatic. Our growth outlook has deteriorated, the reasons are known and we have already taken measures to address them,” said finance minister Antti Rinne in a separate statement. (Reporting By Jussi Rosendahl; Editing by Ruth Pitchford)