S&P Global Ratings has revised Finland’s credit outlook from stable to negative while affirming its AA+ rating, the second highest on its scale, the finance ministry announced recently.

The American credit rating agency cited persistent risks to public finances driven by low economic growth, an aging population, and rising defense and interest costs. It also noted significant spending pressures that limit the impact of the government’s adjustment measures and warned that public debt may continue to rise between 2026 and 2029.

A negative outlook signals that a downgrade is possible if economic and fiscal conditions do not improve. In practice, this can raise borrowing costs for the government and ripple through to the wider economy.

Finance Minister Riikka Purra said the decision was expected. “Unfortunately, Finland’s figures have made it quite clear that this was coming. Our economic growth has been slower than we expected, and the crisis in the Middle East is the latest bad news,” she said.

S&P said policymakers will need to advance fiscal adjustments while supporting economic activity, while also managing the effects of higher energy prices linked to geopolitical tensions.

Purra emphasized that reforms are underway. “The Government has implemented significant growth measures and structural reforms. Naturally, it is a pity that these measures are not having a visible effect at the moment, but they will boost our economy moving forward,” she said.