IMF for cutting Finland´s public debt, rising job, improving education

The recovery of the Finnish economy has strengthened in 2026, but unemployment remains high, said the International Monetary Fund (IMF) in its statement on the Finnish economy published on Friday.

Inflation is expected to moderate toward 2% in 2027 while risks to the growth outlook are tilted to the downside, said the Bank of Finland in a press, quoting the IMF statement as saying.

The IMF recommended that Finland’s policy actions should focus on consolidating the public finances, increasing employment and improving education.

According to the IMF, the banking sector remains resilient, but the weak housing market and elevated household indebtedness, for example, warrant continued vigilance.

The IMF recommended that Finland should begin structural consolidation of 0.5 per cent of GDP annually in 2027 and it should continue until 2035 in order to balance public finances and put public debt on a downward path, said the Ministry of Finance in a press release.

The IMF noted that Finland’s fiscal position remains challenging. The IMF projected that the public deficit will widen in 2026 and, without further measures, continue to widen thereafter.

At the same time, public debt will exceed 90 per cent of GDP in 2026 and continue to rise over the medium term.

Minister of Finance Riikka Purra said that the IMF’s view of the scale of fiscal adjustments to be roughly correct.

“In addition to the IMF, the EU will require us to carry out adjustments of at least the same size, if not larger,” Purra said in the press release.