The European Commission expects Finland's economy to grow by one percent this year and 1.3 percent in 2026, according to its spring economic forecast released on Monday.
This outlook suggests an improvement from last year, when the Finnish economy shrank by 0.1 percent.
In 2025, growth is expected to be driven by rising private consumption, thanks to wage increases, and by public investments, including defence industry spending.
At the same time, the forecast points to some risks, including geopolitical uncertainty, planned cuts to social welfare, and ongoing weaknesses in the Finnish labour market.
"In particular, trade policy uncertainty is expected to make corporations rethink their investment plans. Increases in tariffs are also projected to take a toll on exports, though exports of services to the US are projected to continue contributing positively to growth over the forecast years," the report stated.
The commission further noted that Finland is set to deliver a large cruise ship this year, which will provide a significant boost to exports.
The government's austerity measures are also set to reduce the general government deficit, that is, the difference between government revenue and spending in a given year.
According to the report, this deficit is expected to decline to 3.7 percent this year, down from 4.4 percent last year.
"Cuts to social benefits and the freeze of the indexation of social benefits adopted in 2023 are expected to show their effect in 2025 as well," the report stated.
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