Standard & Poor's became the first major ratings agency to downgrade Finland from AAA to AA+ last year. Moody's and Fitch still rate Finland triple-A, but Fitch changed the outlook to negative in March and Moody's followed suit in June.



Without any meaningful economic recovery and with the credibility of the government's reform plans seriously questioned by the failed Society Pact, more downgrades are ahead. The additional pressure on Finnish ratings becomes clear also by taking a look at the current growth forecasts by the rating agencies.



The outlook is found considerably weaker compared to the latest forecasts of the agencies. The agencies are facing pressure to take down their forecasts, and with those also the ratings. Standard & Poor's and Fitch will both review their ratings on Finland in September (25 Sep and 18 Sep, respectively), while Moody's will have its turn in early October (2 Oct).



"Fitch is the most likely one to deliver the next downgrade, while Moody's may still decide to wait beyond October, considering it only changed the outlook to negative some months ago. While the exact timing of the rating moves is characterized by uncertainty, there is no question about the direction Finnish ratings are currently heading to down", says Nordea Bank.