Economic Survey : Summer 2023

The Finnish economy will not grow this year, as rising prices and interest rates reduce household consumption and investment. The net effect of foreign trade will be positive by a clear margin, with exports growing slightly and imports declining substantially. In 2024, GDP will grow by 1.4% as household purchasing power improves due to the rate of price increases slowing and household incomes growing. In 2025, growth will accelerate to 1.9%, with domestic demand being increased by consumption growth and investments related to the green transition. Employment will return to growth next year. In 2025, the employment rate will be 74.6% and the unemployment rate 6.6%. The general government deficit is projected to be 2.4% of GDP in 2023 and increase to 3% in 2025. Among the subsectors, the largest deficit is in central government. However, the wellbeing services counties are also starting their operations in deficit, and that deficit is not projected to narrow during the outlook period. Municipal administration is projected to be close to balance throughout the outlook period, while social security funds will be in surplus. The general government debt ratio has begun to increase again. The debt ratio will be kept on an upward trajectory by the substantial combined deficit in central government and local government, the ageing of the population and the continued increase of debt servicing costs. Press release: The Finnish economy is stagnant but will pick up – increasing purchasing power and investment will drive growth in the latter part of the year