Finland's economy is still growing, but the recovery now looks more fragile than the finance ministry expected six months ago.
In its summer forecast published today, the ministry said rising energy prices, higher interest rates, and uncertainty linked to the Middle East crisis are slowing the country's return to stronger growth. GDP is forecast to expand by 0.8 percent in 2026, before accelerating to 1.6 percent in 2027 and 1.7 percent in 2028.
That marks a downgrade from the ministry's December 2025 forecast, which projected 1.1 percent growth in 2026. At the time, officials expected improving household consumption, stronger employment, and a gradual recovery in construction to support the economy.
The biggest change is the external environment. Higher oil prices have pushed inflation higher, weakened household purchasing power, and darkened export market prospects. Consumer confidence remains subdued, while the labor market has deteriorated more than expected. The ministry now expects unemployment to reach 10.4 percent in 2026. In December, it anticipated employment would begin improving this year, and that unemployment would gradually fall.
The fiscal outlook has changed little. In both forecasts, the ministry warned that economic growth alone will not repair Finland's public finances. Today's report projects public debt will approach 99 percent of GDP by 2030, up from an estimate of just over 96 percent in last December's forecast.
The shift in the forecasts is small in percentage terms but meaningful in direction. Finland's economy is still moving forward. The public finances underpinning it are moving further into the red.
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5 min read
Finland's economy is still growing, but the recovery now looks more fragile than the finance ministry expected six months ago.
In its summer forecast published today, the ministry said rising energy prices, higher interest rates, and uncertainty linked to the Middle East crisis are slowing the country's return to stronger growth. GDP is forecast to expand by 0.8 percent in 2026, before accelerating to 1.6 percent in 2027 and 1.7 percent in 2028.
That marks a downgrade from the ministry's December 2025 forecast, which projected 1.1 percent growth in 2026. At the time, officials expected improving household consumption, stronger employment, and a gradual recovery in construction to support the economy.
The biggest change is the external environment. Higher oil prices have pushed inflation higher, weakened household purchasing power, and darkened export market prospects. Consumer confidence remains subdued, while the labor market has deteriorated more than expected. The ministry now expects unemployment to reach 10.4 percent in 2026. In December, it anticipated employment would begin improving this year, and that unemployment would gradually fall.
The fiscal outlook has changed little. In both forecasts, the ministry warned that economic growth alone will not repair Finland's public finances. Today's report projects public debt will approach 99 percent of GDP by 2030, up from an estimate of just over 96 percent in last December's forecast.
The shift in the forecasts is small in percentage terms but meaningful in direction. Finland's economy is still moving forward. The public finances underpinning it are moving further into the red.
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