The new credit rating is the country's lowest in nearly three decades.

Credit ratings agency Fitch downgraded Finland's long-term sovereign credit rating on Friday from AA+ to AA — the country's lowest level in nearly three decades — citing high and rising public debt, persistent budget deficits, and insufficient fiscal consolidation efforts.

Despite the downgrade, Fitch maintained Finland's economic outlook as "stable".

In its statement, the agency warned that government measures already in place are unlikely to stabilise the debt-to-GDP ratio over the medium term. It cited rising costs linked to an ageing population, growing social spending, and increased defence expenditures as key drivers of fiscal pressure.

Fitch also expressed scepticism over the scope and timing of new consolidation plans. The agency pointed to a proposed legal framework by the current government that would aim to reduce the debt ratio by one percentage point per year — but noted the legislation would not come into effect until the next decade.

Finland last held an AA rating from Fitch in 1996. The country was rated AA+ from 2016 until Friday's downgrade.