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Finland’s Economic Downgrade Sparks Fiscal Concerns Amid Rising Debt
Finland’s Economic Downgrade Sparks Fiscal Concerns Amid Rising Debt
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BTCCSquare news:
Fitch Ratings has downgraded Finland's credit rating for the first time in nearly a decade, citing persistent government debt growth and inadequate fiscal consolidation. The debt-to-GDP ratio is projected to reach 86.3% by 2025, nearly double the median for similarly rated nations, driven by budget deficits, sluggish growth, and rising interest costs.
Despite a €9 billion stabilization package, Finland's public spending remains stubbornly high at 57.7% of GDP. Age-related expenditures, defense budgets, and social payments show no signs of abating. Planned tax cuts in 2026-2027 may stimulate growth but risk exacerbating deficit pressures, with Fitch forecasting deficits above 3% through at least 2027.
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