economic development, economic fluctuation, public finances, development (passive), economy, Economic Prospects
Gross domestic product (GDP) in Finland is projected to grow by 1.4% in 2022. Russia's invasion of Ukraine has very rapidly pushed up prices of energy, raw materials and food. The subsequent rise in consumer prices will cut household purchasing power, consumption and economic growth significantly. Foreign trade with Russia is declining and export growth is slowing. Increased uncertainty is shifting investments to the future. GDP growth will slow to 1.1% in 2023 and continue to grow moderately by 1.3% in 2024.
The forecast assumes that the sanctions against Russia in force in early June 2022 will remain in place. Coronavirus has not yet disappeared and new cases of the disease are still emerging, but the forecast assumes that no restrictions with economic impacts will be imposed to prevent the spread of the COVID-19 pandemic.
Following the easing of the COVID-19 crisis and through the rapid growth of the economy, the general government budgetary position has improved. The deficit will decrease this year and next, but will start to grow again thereafter. As nominal GDP grows rapidly, general government debt will stabilise relative to GDP this year and next. As nominal GDP growth slows and the combined deficit of central government, local government and wellbeing services counties remains substantial, the debt ratio will start to increase again.