The IMF estimates that Finland should consolidate its general government finances by approximately EUR 1.5 billion per year. Consolidation should be continued until the fiscal balance is closed and debt begins to decline.
Finland’s Ministry of Finance announced that the International Monetary Fund (IMF) published its statement on the Finnish economy on 10 November 2025.
The report praises Finland’s new national fiscal framework. According to the IMF, the reform demonstrates a strong cross-party commitment to consolidation. The IMF issues statements on all its member countries as part of its country monitoring activities.
The IMF stated that Finland should seek to consolidate by half a per cent of GDP annually. This would correspond to EUR 1.5 billion a year. According to the IMF, this pace of consolidation should be maintained until the fiscal balance is closed and debt begins to decline.
Minister of Finance Riikka Purra finds the IMF’s view of the need for fiscal adjustment to be roughly correct.
“The IMF’s estimate of the scale of the necessary adjustments is roughly the same as the Ministry of Finance’s estimate in the reform of fiscal policy rules. The hardest work remains ahead: making decisions on new adjustments. This will take at least two parliamentary terms,” Minister Purra says.
Economic growth expected to accelerate next year
The Finnish economy has recovered slowly, but the IMF forecasts that growth will accelerate to 1.5% in 2026 and 2027. The general government deficit is expected to remain broadly unchanged this year, due to weak public revenue growth, higher defence spending, and pressure from health and social services. General government debt is expected to approach 90% of GDP this year, according to the IMF.
The IMF also highlights the resilience of the banking and financial system. Despite a prolonged rise in cyber threats, the impact on financial stability has so far remained contained.
Recommendations include bolstering skills and facilitating AI adoption
The IMF notes that the government’s labour market reforms and increased immigration have supported an increase in labour supply. Changes to unemployment benefits have also strengthened incentives to accept work.
The IMF recommends that Finland develop active labour market policies and upskill the labour force, which will be crucial to facilitate AI adoption. The IMF encourages Finland to increase its tertiary education attainment, as Finland has fallen behind its peer countries.
Additionally, the IMF encourages Finland to ease regulatory barriers to businesses to boost productivity.
Finland should also continue efforts to improve access to funding and investment.
