International Monetary Fund urges Finland to take further action to balance general government finances

The International Monetary Fund (IMF) published its statement on the Finnish economy on Tuesday 23 January.

According to the IMF, the Government is ambitiously seeking to stabilise general government finances, but the current measures are not enough to stop the growth of the debt ratio. The IMF recommends new measures in addition to the spending cuts outlined in the Government Programme. For example, it recommends improving the efficiency of the wellbeing services counties.

The IMF also recommends that Finland take action to increase central government revenues, for example, through tax reforms.

IMF anticipates modest economic growth

The Finnish economy recovered swiftly from the pandemic. However, the outlook has worsened due to high inflation and rising interest rates. Russia’s invasion of Ukraine also casts a shadow over the economic outlook.

The IMF anticipates modest growth in the Finnish economy this year. However, there are risks in the outlook that could tip Finland’s economy into a longer and wider recession.

The IMF's statement also examines the labour market, climate policy, productivity and the financial market.

Minister Purra stresses need for further action

Minister of Finance Riikka Purra welcomes this report by external experts, which provides support for policy.

“The IMF’s recommendations support my view of public finances. We need to do more to reach the goals of the Government Programme. New measures need to be broad and ambitious,” Purra says.

Statement a part of IMF country monitoring

The IMF issues statements about all its member countries as part of its country monitoring activities. The IMF's visits to member countries are called Article IV Consultations, because they are required by Article IV of the IMF's Articles of Agreement. 

The statement is based on assessments by IMF experts and on discussions they have held with Finnish authorities, labour market organisations, financial institutions, research institutes and other organisations.

Inquiries:
Sara Hellemaa, Financial Specialist, tel. +358 295 530 067, sara.hellemaa(at)gov.fi
Jussi Lindgren, Special Adviser to the Minister of Finance, tel. +358 295 530 514, jussi.lindgren(at)gov.fi