Finnish finance ministry predicts 1.6 pct economic growth for 2025-Xinhua

Finnish finance ministry predicts 1.6 pct economic growth for 2025

Source: Xinhua

Editor: huaxia

2024-06-17 22:18:00

HELSINKI, June 17 (Xinhua) -- The Finnish Ministry of Finance forecasts a 1.6 percent economic growth for 2025 and 1.5 percent for 2026 respectively, and no growth at the annual level for this year, in a survey published on Monday.

According to the survey, private consumption growth will strengthen as inflation slows and interest rates fall. Investments are expected to rise as construction recovers from its sharp decline and as investments in energy transition and security increase. Meanwhile, the government measures to strengthen general government finances are expected to result in prices increase, reduction of domestic demand, and slow economic growth in 2025 and 2026.

"Growth is slowly resuming, but there is concern about general government finances. Although much depends on the economic upturn, it must also be ensured that the decisions made and local government's plans to curb expenditure growth are implemented fully and strengthen general government finances," said Mikko Spolander, Director General of the Economic Department of the ministry.

The Ministry noted that world trade is recovering, with Finnish exports growing as a result. However, Finnish exports are expected to decline this year, partly due to the strikes earlier in the year.

The Ministry reported that general government finances will remain in deficit, with debt continuing to accumulate. The public sector deficit is predicted to be 3.7 percent of gross domestic product (GDP) this year, revised from an earlier estimate of 3.5 percent. The deficit forecast is 3.1 percent for 2025 and 2.6 percent for 2026 respectively.