Finland's Ministry of Finance has published its Spring 2026 Economic Survey, saying the crisis in the Middle East and higher oil prices will delay Finland’s recovery and keep public finances under sustained pressure. Gross domestic product is now projected to grow by 0.6 per cent in 2026, before rising to 1.7 per cent in both 2027 and 2028, while the general government deficit is expected to widen to 4.6 per cent of GDP in 2026 and remain at that level until 2029. Higher energy prices are expected to push inflation to around 2 per cent in 2026, weaken household purchasing power and slow exports, although pay rises and tax cuts will support incomes. Investment is still forecast to increase, led by defence procurements and energy and technology transition projects, but the recovery in housing construction has been pushed back and unemployment has risen above 10 per cent, with labour market improvement not expected until 2027. The ministry attributed the wider 2026 deficit to weaker growth, the start of expenditure recognition for fighter jet purchases and a slower pace of fiscal adjustment. It projects the debt-to-GDP ratio to rise from more than 88 per cent in 2025 to more than 91 per cent in 2026 and above 99 per cent by 2030, while the combined central and local government deficit remains around 5.5 per cent of GDP across the outlook period. The central forecast assumes the Middle East crisis is short-lived, does not trigger major knock-on effects in commodity prices and does not lead to major fiscal tightening in the euro area. The survey also includes a less favourable scenario based on a prolonged crisis and, as the spring forecast, will provide the basis for the government’s spending limits decisions.

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