The Commission forecasts: Finland’s economy will grow by 1.3 percent next year. Photo: Emmi Korhonen / Lehtikuva
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Finland is emerging from a two-year recession, with the European Commission forecasting a one percent growth in 2025 and a further 1.3 percent in 2026.
The spring economic forecast, published Monday, projects that private consumption and public investments will be the primary drivers of this recovery. Rising wages are expected to increase household spending, while government investments, including in the defence sector, are also contributing.
Last year, Finland’s economy contracted by 0.1 percent.
The Commission also highlighted the expected export boost from the delivery of a large cruise ship scheduled for this year. Service exports to the United States are also anticipated to continue supporting the economy.
However, risks remain. The report lists geopolitical instability, trade barriers, and structural weaknesses in the labour market as key concerns.
“In particular, trade policy uncertainty is expected to make corporations rethink their investment plans. Increases in tariffs are also projected to take a toll on exports,” the report noted.
The forecast also addresses the Finnish government’s austerity measures, which are set to reduce the general government deficit. The deficit is projected to shrink from 4.4 percent last year to 3.7 percent in 2025.
These reductions stem from social benefit cuts and the freeze of benefit indexation adopted in 2023. The full effect of these changes is expected to become more apparent next year.
HT
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Source: www.helsinkitimes.fi
