Minister of Finance Riikka Purra:
IMF supports Government’s economic policy

The International Monetary Fund (IMF) recommends further adjustments to public finances and continued structural reforms for Finland. The IMF published its statement on the Finnish economy on Friday 8 November.

Minister of Finance Riikka Purra considers it important that external experts evaluate Finland's economy. Finland's fiscal situation is challenging.

“The Government is committed to the adjustment measures it has already decided on. We are monitoring the situation and will assess the need for further measures in the mid-term policy review session next spring,” Minister Purra said.

The IMF commended the adjustment measures undertaken by the Government last April. However, the IMF sees a need for greater fiscal adjustments in order to stabilise and reduce the general government debt-to-GDP ratio over the medium term. Additional measures would be needed especially in 2026 and beyond to put debt on a firm downward trajectory.

The IMF identified a need for the public sector to strengthen its revenue base. According to the IMF, growing costs of health and social services, increased defence expenditure and costs associated with immigration pushed the deficit higher.

Structural reforms to support growth

The IMF urges Finland to continue structural reforms to support business innovation and growth. Slow productivity growth is a particular problem for Finland. According to the IMF, attention should be given to the tax treatment of venture capital funding and rebates associated with investment spending by firms. Focus should also be on potential barriers to entry and excessive regulation in the service sector.

Minister Purra noted that the Government has implemented growth measures and structural reforms, for example in the labour market. These measures and reforms will support economic growth, which will make it easier to balance public finances.

“The effects of growth measures and structural reforms will take time to become visible. The Government is also developing new measures. We have established the Room for Growth expert group to identify additional measures,” Minister Purra said.

Statement a part of IMF country monitoring

The IMF issues statements on 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 had with Finnish authorities, labour market organisations, financial institutions, research institutes and other organisations. The IMF will publish its full report early next year.

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