Finland's growth poised to resume but deficit to persist in general government finances
Jun 18, 2024
Helsinki [Finland], June 18: The economic recession is receding, and growth is gradually resuming. General government finances will, however, remain in deficit and debt will accumulate further, according to the forecast published by the Ministry of Finance today.
The Finnish economy grew slightly in the first quarter of 2024, and growth is projected to strengthen towards the end of the year. Gross domestic product (GDP) will not, however, show growth at the annual level in 2024. In 2025, GDP is projected to grow by 1.6% and in 2026 by 1.5%.
Growth of private consumption will strengthen as inflation slows and interest rates fall. Investments will increase as construction recovers from its sharp decline and investments related to the energy transition and security increase. The Government's measures to strengthen general government finances will increase prices, reduce domestic demand and slow economic growth in 2025 and 2026.
"Growth is slowly resuming, but concern is caused by general government finances. Although a lot depends on the economic upturn, it must also be ensured that the decisions made and local government's own plans to curb expenditure growth will be implemented and will strengthen general government finances to the full extent," says Director General Mikko Spolander.
Source: Emirates News Agency
