PUBLICATIONS OF THE MINISTRY OF FINANCE 2024:69

Economic Survey, Winter 2024

The Finnish economy switched from a downturn to slight growth in the first part of the year but, on an annual basis, gross domestic product (GDP) will be 0.3% lower in 2024 than in the previous year. Output has been most adversely affected by the significant reduction in construction, and private consumption will also decrease this year. The growth of Finnish exports is accelerating, but at a slower pace than expected, as the subdued economic growth of the Eurozone is holding back demand for goods exports in particular. The slowing of inflation and the decline in interest rates will put both consumption and investment on a path of growth next year. GDP is projected to grow by 1.6% in 2025 and 1.5% in 2026 and 2027. The improvement of the labour market is shifting to 2025. In 2026–2027, employment will improve as the economy strengthens, and the unemployment rate will fall from 8.4% in 2025 to 7.4% in 2027.

The general government deficit is expected to be 4.2% of GDP in 2024. The weak economic cycle is reflected in public finances in many ways and, in addition, the rapid inflation of recent years increases expenditures substantially still this year. However, the deficit will gradually start to shrink as a result of the economic recovery and the Government’s measures. The deficit is projected to be 3.5% in 2025 and 2.0% in 2029. Large central and local government deficits and the weak economic cycle will rapidly increase the debt ratio in the early part of the outlook period. This year, the debt-to-GDP ratio will rise above 82%, from which it will gradually increase to 87% in 2029. The sustainability gap is expected to be 1.5% of GDP.