HELSINKI, Sept. 22 (Xinhua) -- The Finnish economy is slowly recovering from recession, with modest growth ahead but persistent challenges in employment and public finances, the Ministry of Finance said in its autumn forecast released Monday.
According to the ministry, Finland's gross domestic product (GDP) is projected to grow around 1.0 percent this year, 1.4 percent in 2026 and 1.7 percent in 2027. "Economic recovery has been slow, but there are signs of faster growth ahead.
A marked slowdown in inflation and falling interest rates have improved household purchasing power," the ministry said in a statement.
Despite the improvement, weak employment and economic uncertainty have kept households cautious, leading them to save rather than spend. Unemployment currently stands at about 9.4 percent of the labor force, with a decline to 9.0 percent expected next year.
Investments are expected to expand strongly in the next few years, supported by the energy transition and large-scale defense procurement, including fighter aircraft purchases. Construction, however, remains weak, with housing starts still well below long-term needs.
On public finances, the ministry projected the general government deficit at 4.3 percent of GDP this year, narrowing to 3.6 percent in 2026 and 3.1 percent in 2029. The debt ratio is expected to stabilize temporarily in 2027 before resuming growth.
The ministry warned that Finland's public finances remain in "deep structural imbalance," with a sustainability gap of about 2 percent of GDP, or roughly 7 billion euros (8.25 billion U.S. dollars), by the end of the decade.
The forecast also highlighted international risks. While global uncertainty has eased somewhat thanks to preliminary customs agreements, significantly higher U.S. tariffs and a strong euro are weighing on Finnish exports. Export growth is being hindered, though the recovery of the euro area is providing some support. (1 euro = 1.18 U.S. dollar)
