Economic Survey : Spring 2024

Abstract

The increase in prices and interest rates has reduced investments and household consumption. The Finnish economy will not grow in 2024, having contracted by 1% last year. The slowing of inflation and the downward turn in interest rates, together with the fairly good development in household income, will increase the disposable income and consumption of households. Investments will also turn to growth in 2025. The Government’s adjustment measures will reduce domestic demand, increase prices and dampen economic growth in 2025 and 2026. GDP will grow by 1.6 per cent in 2025 and by 1.5 per cent in 2026. Employment will decrease slightly in 2024 but increase from 2025 onwards, supported by demand growth and employment measures. In the 15–64 age group in 2026, the employment rate will be 74.5% and the unemployment rate will be 6.7%. Barring additional measures, the general government deficit will deepen further this year, exceeding 3.5% of GDP. As a result of the measures decided on by the Government in the spending limits discussion, from 2025 onwards, the deficit will be less than 3.0% of GDP. The decisions made in the spending limits discussion will slow the growth of the debt ratio, and the debt ratio will remain under 85% in 2028.

<a href=https://vm.fi/en/-/economy-to-recover-from-recession-but-public-finances-to-remain-in-deficit>Press release</a>