Board | The government promised to put “Finland in order” – The numbers reveal how things have turned out

PMinister of Foreign Affairs Petteri Orpon The (kok) government has been “fixing Finland” for a little over a year. At least this is how Orpo himself has defined the mission of his government.

The government has already agreed on 9 billion euros in government spending cuts and other measures to curb Finland’s indebtedness.

A year has passed and it’s time to look at whether there are still signs of the success of the Orpo government’s policy.

Ballitus has already implemented a significant part of its difficult decisions, such as cutting unemployment and other social security.

Last year, the cuts were largely aimed at the unemployed, students and the poor.

When the economic situation turned out to be worse than expected at the beginning of this year, the government was forced to slightly tighten the taxation of the wealthiest and pensioners as well.

The government has tried to promote state savings and employment by, among other things, weakening the housing allowance and unemployment insurance and ending the rotation leave and adult education support.

BElsing’s Sanomat found out from the indicators describing the Finnish economy whether the “rehabilitation” of the Finnish economy has already begun.

Economy descriptive statistics still paint a grim picture.

To some extent, the Finnish economy is at least as bad as it was a year ago, but economic forecasts are already pointing to a small economic growth, paced by falling interest rates.

A year is a short time to assess the government’s success, because not all planned laws are in force yet, and the effects of the measures on employment, for example, will be delayed, if they come at all.

On the other hand, it could already be seen in the economic indicators, if the economy and the Finns really believe in the government’s medicines. After all, the government’s program is full of items that are straight from the wish list of business organizations.

Let’s start with the metrics where companies, investors and citizens reveal their expectations.

Businesses are down

Einternet life the confederation EK’s confidence indicator, which examines the future expectations of companies, fluctuated slightly upwards in June. However, the index describing the indicator’s expectations for all four sectors, i.e. industry, retail trade, services and construction, is now at a lower level than at any time since January 2018, with the exception of the exceptional corona period.

The interest rate, international economic cycles and the war in Ukraine explain a large part of the despair. Confidence does not seem to be boosted even by the government’s promised easing of working life rules for companies, increased research funds and new investment support.

The strikes scared the companies

Bone of the key actions of allitus is to limit political strikes to one day.

There have generally been very few political strikes in Finland, with the exception of last spring, when the industrial unions representing the workers opposed the actions of the Orpo government with strikes that stopped exports and imports for several weeks.

In late spring, Teknologiateollisuus, which represents the engineering and electronics industry, among other things, asked its member companies “will strikes reduce your company’s investments in the next few years?”

About 40 percent of the respondents said that investments will decrease either clearly or slightly. The companies answered this way, even though it was already known at the time of the survey that the government would limit political strikes to one day, raise strike fines and set limits on support strikes.

KI guess ysely’s criticism is aimed at the unions that organized the strikes, but on the other hand, there wouldn’t have been strong political strikes without the government’s way of enforcing its decisions.

The future will show which will have a greater impact on the economy: the negative effects of the strikes that have taken place or the positive effects of the government’s actions for companies.

Share prices do not show joy

OIt is difficult to see the joy caused by the rpo board’s program in business life in the general index of the Helsinki stock exchange. In general, Finnish governments’ influence on the stock market is limited.

The realization of the long-term wishes of the business world and the possible four-year reign of the right-wing government could somehow be reflected in the stock market. After all, it is said that the stock exchange rate does not so much reflect the current but the future profit situation.

However, the general index of the Helsinki Stock Exchange is pretty much at the same level as when the president appointed the government on June 20, 2023.

At the same time, increases of up to 30 percent have been seen in the general indices of the Copenhagen and New York stock exchanges, and a 17 percent increase in Stockholm as well.

Could consumer greed be slowing down?

Ewhat about citizens’ trust in their own and the nation’s future? This is also influenced by many other things than the government. I guess the government itself would have mentioned it as a credit, if the trust index had started to rise sharply after the appointment of the government.

However, this has not happened.

In Finland, consumers have been suffering from chronic pain for almost ten years. The confidence index has turned positive only in 2017–2018 and 2021. The general confidence index includes a view of both one’s own and the public finances.

The appointment of the Orpo government has not even been reflected in consumers’ confidence in their own finances, although the goal of the right-wing government is to increase citizens’ ability to support themselves without subsidies.

Confidence has remained negative throughout the government term, although the amount of negativity has slightly decreased in June.

However, the positive thing is that even though the confidence index is in the red, it shows that confidence has already increased Sanna Marini (sd) to the level of the board for the rest of the term. This may also be affected by the decrease in interest rates and the slowdown in price increases.

Trust is lower the lower it is on the scale.

Citizens faith in the improvement of employment collapsed soon after the appointment of the government, although the main reason was hardly the government.

Finns still have a rather negative image of employment improving in the next 12 months. Belief in the improvement of the employment situation was this low last time during the corona virus.

The economy’s bright spot is fading

SFor a long time, the bright spot of Finland’s economy has been fairly stable employment, but now the signs point to a weakening of employment.

Improving employment is one of the government’s main goals, but it doesn’t look good.

According to Statistics Finland’s labor force survey, the seasonally adjusted trend of the employment rate of 20-64 year olds has been slowly declining for the past year, even though employment is still strong in relation to faltering economic growth.

The employment rate in Finland had time to increase by almost one ring, except during the corona period, until the time before the start of Orpo’s government negotiations.

There is a bit of light in the housing market

Aof sunto markets the collapse has happened primarily on Orpo’s watch, although it is not primarily the fault of Orpo’s board.

Construction companies’ confidence in their future even collapsed to a historic low just after the appointment of Orpo’s government, although it may be a coincidence.

Instead, the government’s share can be if companies have expected more significant support measures, which the government has implemented.

The housing market is also still stuck.

There have been indications in the summer that the sale of owner-occupied apartments has picked up a bit, but these indications have been seen for at least half a year without any real change.

The debt mountain grows and grows

Eso indebtedness, which Orpo’s government has taken a considerable number of measures to slow down. The worst thing would be if the decisions that made everyday life miserable for many people didn’t bite.

In the government program, the government promises to ensure that the debt ratio of the public finances is stabilized and then turned to a permanently decreasing career in the general election review.

According to the National Audit Office’s June report, “despite the adjustment measures decided now, the debt ratio of Finland’s public entities is predicted to grow in the long term”.

According to the agency, in light of the forecasts, the government’s goals do not seem to be coming true, despite additional measures.

However, the report says the same as several economic forecasts. Although the cyclical state of the Finnish economy has further weakened in the winter of 2024, it seems that the bottom has been reached and a slow turn for the better is ahead.

Vaccording to irasto, the government’s actions to strengthen employment have progressed well.

The government aims for 100,000 additional employees and, through employment, to strengthen the public finances by two billion euros by 2027.

However, the agency says that “according to the calculations of the fiscal supervision, the combined employment effect of the measures decided so far is 65,200–82,100”. This means that, according to studies, the government’s actions would bring that number of people employed. It is by no means certain.

However, the agency reminds that the reign is still young.

And so it is.

Three years from now, the indicators presented in this paper may show that the nation’s economy is on the mend. The turnaround can be quick if the interest rate starts to fall, international demand improves, the war in Ukraine does not get worse and, most importantly, the managers finally know how to increase the productivity of their companies on a large scale.

If this does not happen, the government can always say that the situation would be even worse without the government’s actions.

Mthe ittars show that the government’s intentions to care for business life are at least not yet reflected in the economy. Instead, the decline in interest rates and the improvement of international business cycles are beginning to be seen in the prospects of the Finnish economy. It may be different in autumn, although growth was already expected a year ago.

On the other hand, it is not known what the numbers would be like if Finland had a government pursuing a different kind of policy.

The most worrying thing for the government is the bleakness of Finns’ future prospects, but even that can change quickly. Belief in the future often boosts the economy, and economic growth increases employment and reduces the need to make more cuts.

Summer seems to have improved the mood

Olet’s do it and the government’s own Citizen’s Pulse survey. The June survey reported that moods and trust in society have improved significantly in June.

Confidence in the future has also grown in June, but it was about time. The share of very or very confident people has decreased almost throughout Orpo’s reign and was lower than ever in the history of the pulse until June.

Personal stress has clearly decreased compared to the beginning of the year. As many as 72 percent of those who responded to the survey feel happy and cheerful.

“Citizens’ moods have been at the same high level as last time in the summer of 2022”, continues the happy message of the press release published by the Government in June.

On the other hand, the announcement does not say that the citizens’ trust in the government collapsed after Marin’s government was replaced by Orpo’s government.

Even at its worst, 60 percent of citizens trusted Marin’s government, 40 percent trusted Orpo’s government in the spring.

In the summer, confidence rose to nearly 50 percent.

How the nation’s pulse will beat in the future is up to guesswork regarding this survey, as the government has decided to end the Citizen’s Pulse survey as part of austerity measures.