The latest survey from the Ministry of Finance forecasts that the Finnish economy will grow by 2.4 percent in 2018 which it says means an increase in employment, a decline in the general government deficit and slower growth in the state’s debt burden.
The Ministry of Finance’s forecast shows that Finland will post a GDP growth figure of 3.1 percent for the full year 2017, and that the growth rate will then slow to around 2 percent.
Foreign trade and domestic demand are expected to be the main drivers in the economy over the next few years.
Pay is forecast to rise more rapidly in 2018 and 2019.
Boost in employment
Employment growth will accelerate to 1 percent and the earnings level in the coming year is forecast to rise by 2 percent, assuming that the forthcoming pay settlements are in line with agreements already made.
The Ministry of Finance survey says that private consumption growth next year will be driven by higher earnings and a rising employment rate. Investment of all types will increase, and the boom in housing construction shows no signs of slowing down.
Prices will rise in 2018 in a broad range of different product categories, but the increase in the prices of services will continue to have the greatest impact on overall inflation.
In 2019, the Ministry expects Finland’s GDP to grow by 1.9 percent. GDP growth will slow the rise in the state’s debt burden but will not eliminate the general government deficit.
The public-debt-to-GDP ratio began to decline in 2016, and the debt ratio is shrinking due to rapid growth in Finland’s GDP. In 2019 the ratio is expected to fall to slightly below 60 percent.
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