Government submits supplementary budget proposal to Parliament
On Thursday 5 February, the Government submitted a supplementary budget proposal for 2026 to Parliament. The supplementary budget focuses on boosting growth and investments with the goal of supporting employment. The proposal also includes a decrease to revenue estimates.
In the supplementary budget proposal for 2026, the appropriation requirement will increase by EUR 438 million, while actual revenue will decrease by EUR 952 million. Together, these will increase the central government’s net borrowing requirement by EUR 1,390 million.
Net borrowing in 2026 is expected to total nearly EUR 10.8 billion. The deficit is being reduced by entering the remaining cash receipts of the National Housing Fund, which was dissolved on 1 January 2026, as revenue in the Budget. This will not reduce central government borrowing. Excluding this one-off item of EUR 2.3 billion being entered as revenue, the deficit is EUR 13.1 billion.
Growth measures will boost economic growth, investments and employment
The Government is proposing a total of EUR 145 million for the implementation of a growth, investment and employment package.
The proposal includes a budget authority of EUR 48 million for projects testing new technology at power installations. Aid can be flexibly allocated to projects with considerable potential for energy generation and exports. These include hydrogen fuels, electrofuels and other renewable fuels for transport, such as biogas, as well as energy storage and energy efficiency technologies.
The proposal includes a budget authority of EUR 78 million and an appropriation of EUR 20 million for Important Projects of Common European Interest (IPCEI). An IPCEI is a state aid instrument that allows EU Member States to fund research and development projects and the first industrial deployment stage in strategically significant industries more flexibly than other state aid instruments. Participating in these projects will help renew Finland’s economic structure and offer businesses the opportunity to link up with European value chains.
The proposal also includes a budget authority of EUR 19 million and an appropriation of EUR 6 million for development and investment projects in small and medium-sized enterprises. The funding will be allocated to investment projects that help SMEs grow and expand internationally, such as the development and deployment of battery technology and material efficiency solutions.
Other changes
The proposal includes an increase of EUR 139 million to the procurement authority for the Squadron 2020 project to cover the additional costs of constructing the vessels. The maximum amount of the procurement authority will be increased without changing the appropriation of the item. The expenditure arising from the use of the authority will be paid using appropriations already granted to the Finnish Defence Forces.
The proposal includes an increase of EUR 6.2 million in funding for the construction phase of the West Railway. The maximum amount of the central government's equity financing is proposed to be a maximum of EUR 385 million, provided that West Railway Ltd's other shareholders match the financing together and contribute at least EUR 385 million to the project. Under the terms and conditions of the shareholder agreement, the central government would commit to the proposed budget authority by signing the shareholder agreement.
The proposal includes EUR 402 million for the implementation of ownership arrangements relating to Fingrid Oyj. The central government together with OP Pohjola intends to acquire all of the shares in Fingrid Oyj owned by Ilmarinen Mutual Pension Insurance Company.
The proposal includes EUR 0.3 million for psychosocial support of the Sámi people, which will be allocated from the operating expenses of the Prime Minister’s Office.
Revenue estimates take into account Ministry of Finance's December forecast
The Government proposes a decrease of EUR 952 million to the revenue estimate due to revised tax revenue estimates. The new tax revenue estimate is based on the macroeconomic forecast published by the Ministry of Finance in December 2025.
The proposal reduces the revenue estimate for earned income and capital gains taxes by EUR 629 million due to weaker economic forecasts and lower than expected accrual data as well as a lower source tax forecast.
The Government proposes reducing the revenue estimate for value-added tax by EUR 323 million. This change is explained by lower than expected tax receipts and weakening tax bases.
The budgeted central government debt at the end of 2026 is estimated to be approximately EUR 201 billion, which is around 69 per cent of gross domestic product (GDP).
Further information: Mikko Martikkala, Special Adviser to the Prime Minister in Economic Affairs, tel. +358 295 161 171 and Niko Ohvo, Special Adviser to the Minister of Finance, tel. +358 295 530 030
The email addresses of the Finnish Government are in the format [email protected].