The International Monetary Fund (IMF) estimates that the Finnish economy has begun to recover from the recession. However, economic growth became weak.
Growth is expected to reach 1.6 percent next year and remain at a rate of less than one and a half percent in the near term. This year, the economy will shrink by 0.3 percent, the IMF predicts.
Finland's economic prospects are weakening due to external risks, such as the impact of Russia's war of aggression.
The IMF recommends that Finland continue to take steps to stabilize public finances and reduce debt. The aim is to stabilize the financial position of the public finances by 2029.
On the labor market, Finland should continue to take steps to bring employment closer to the levels of other Nordic countries.
According to the IMF, changes to unemployment benefits, social security and taxation are positive steps.
– However, such reforms should be complemented by policy measures that reduce the problem of skills mismatch and strengthen higher education, the IMF suggests.
Finland must also undertake more structural reforms to strengthen innovation and growth. Currently, productivity growth in Finland is too weak, especially in the service sector.