Economic outlook | VM’s forecast: The government’s debt-taking violates EU borders, billions are left short of the economic target

Finland the economy will recover from the recession and turn to growth next year, predicts the Ministry of Finance. This year, the gross domestic product will shrink slightly, but next year it is forecast to grow by 1.7 percent.

Despite this, public indebtedness continues to be strong. In the forecast, the deficit of the public finances is 3.7 percent this year and 3.2 percent next year in relation to the gross national product.

The three percent reference value of the EU rules therefore threatens to be exceeded both this year and next year, the ministry states. An overrun can lead to the initiation of the so-called deficit procedure.

Treasury predicts that the government will fall far short of its 2027 balance target.

According to the government program, the deficit of the public finances should be no more than one percent of the gross national product at the end of the government term. In the forecast, the deficit ratio in 2027 is 2.3 percent. The gap to the government’s goal is therefore more than four billion euros.

“It seems that the patience of those who have been waiting for a turnaround in the economy is being rewarded. On the other hand, the outlook for the public finances cannot be treated with the same confidence. Even though deficits are decreasing and indebtedness is slowing down, public finances remain at the risk limits”, Director General of the Ministry of Finance Mikko Spolander says in the announcement.