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Fitch lowers Finland's outlook to negative

Staff writer |
Weak growth prospects for the Finnish economy, including a fall in exports to Russia, have led Fitch to lower its outlook on Finland's sovereign credit rating from stable to negative.

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Fitch Ratings Agency has cut its outlook on Finland's Finland sovereign debt rating on the basis of the country's weak prospects for growth, as GDP remains 7 percent below the level seen before the 2008 financial crisis.

"Real GDP declined 0.1% in 2014, after falling in both 2013 and 2012," Fitch noted in a statement, adding that it expected growth for the coming year to total 0.5 percent, a downward revision of 0.6 percentage points since the last review in September, when the agency affirmed the country's international credit rating as "Finland with a Stable Outlook," but sounded caution on the prospects for Finland's export market as a result of the EU's restrictive measures against Russia, and Russia's counter-measures.

"External trade prospects have been adversely affected by a sharp fall in exports to Russia, Finland's third-largest trading partner," read the statement, which also cites "sector-specific shocks in the electronics and paper sectors," and a decrease in the working-age population since the final quarter of 2010. The agency expects growth to accelerate to 1.3% in 2016.

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