Finnish economy’s recovery moving modestly forward

The Bank of Finland has today published its forecast for the Finnish economy for the period 2025–2028. Growth in the Finnish economy for the full year 2025 will be 0.2%. Growth will rise to 0.8% in 2026 and to 1.7% the following year. In 2028, the final year of the forecast period, growth will level out at 1.5%.

Consumer spending will grow and export markets will pick up

“Consumer spending has been curbed by the weak consumer confidence in the economy, but spending will pick up and start to grow in 2026, when real earnings increase and the labour market gradually strengthens. The reductions in interest payments will also boost consumer spending. Spending will continue to strengthen in 2027 and 2028,” says the Bank of Finland’s Head of Forecasting, Juuso Vanhala.

Business investment will start to grow in 2026 and will continue growing in both 2027 and 2028, even though some investment plans will be hampered by economic uncertainty. This investment growth will come from green investments, among other things. Housing construction will be subdued in the immediate years ahead. New-build housing construction is being held back by the difficult housing market, although the situation will gradually ease when household incomes and consumer confidence grow.

“Exports are on the rise. There will be moderate growth in Finnish exports in the years 2026 to 2028, supported by the pick-up in export markets and by higher export demand. But demand will be curbed by geopolitical uncertainties for some time to come,” says Vanhala. The growth in defence procurement will increase imports.

Inflation will remain moderate

Inflation has fallen in 2025 to below 1.5%, and it will remain close to this level in 2026 as well. Inflation will rise gradually as the economy strengthens and will reach 1.9% in 2028.

Finland’s public finances will continue to be in deficit

 Finland’s public finances will remain deeply in deficit and public debt will continue to grow. Fiscal consolidation in 2025–2027 is being implemented through cuts in public expenditure and increases in indirect taxation. However, the reductions in personal and corporate income taxes will slow the fiscal adjustment, and defence investments will further deepen the deficit. Finland’s fiscal deficit for 2025 will be 3.7% of gross domestic product (GDP), and the deficit will shrink only a little in 2026 and 2027. The general government debt-to-GDP ratio will exceed 88% in 2025 and rise to 93% in 2028.

Presentation 19 December 2025, Head of Forecasting, Juuso Vanhala (in Finnish)

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