On Friday 25 July, the Fitch credit rating agency lowered the rating of Finland’s central government debt by one grade from AA+ to AA. Finland’s outlook is now rated as stable.

Timetable for the preparation of the budget proposal:

• 6 August: Budget session at the Ministry of Finance
• 8 August: The Ministry of Finance will submit its proposal to the Ministries and publish it at budjetti.vm.fiLink to an external websiteOpens in a new tab (in Finnish)
• 1–2 September: Government session on the Budget
• 22 September: A debate on the budget proposal will be held at an extraordinary meeting of the Ministerial Finance Committee and a government plenary session, after which the proposal will be published at budjetti.vm.fi Link to an external websiteOpens in a new tab(in Finnish).

Finland’s economy is recovering from recession, but trade disputes and uncertainty are delaying faster growth. Public finances are in dire need of a turnaround, as deficits remain deep and the debt ratio is threatening to rise above 90 per cent, according to the forecast published by the Ministry of Finance on 16 June.

The European Commission recommends that the Council of the EU activate the national escape clause for Finland. The recommendation is based on increasing defence spending. The Commission does not recommend opening an excessive deficit procedure.

The OECD sees vast potential for clean economic growth in Finland. However, structural reforms will be required to realise this potential. Among other things, the OECD recommends that Finland boost higher education, attract high-skilled immigrants and improve incentives for investments. Further adjustments to public finances are necessary due to rising defence spending.