PUBLICATIONS OF THE MINISTRY OF FINANCE 2025:31

Economic Survey, summer 2025

In 2024, Finland’s gross domestic product (GDP) contracted by 0.1% at the annual level, but the economy returned to growth during the year. A slowdown in inflation, lower interest rates and tax cuts will boost consumption. Recovery of the construction sector, energy transition and defence materiel purchases will increase investments. However, economic growth is hampered by tariff increases introduced by the United States. GDP will grow by 1.0% in 2025, by 1.5% in 2026 and 1.7% in 2027. Employment will improve significantly only in 2026 and 2027 as economic growth strengthens. The unemployment rate will fall from 9.3% in 2025 to 8.3% in 2027.

The starting point for the current year was weak as the general government financial deficit amounted to 4.4% of GDP in 2024. Despite stronger economic growth and the Government’s adjustment measures, the fiscal position of general government will improve only moderately during the outlook period. In particular, the decisions made in spring 2025 on tax cuts and increases in defence expenditure will weigh on central government finances. The general government deficit will be 4.2% of GDP this year and will gradually fall to around 3.5% in 2027. The deficit will remain above three per cent throughout the forecast period, and the debt ratio will rise to over 90% in 2029.