Finland's Ministry of Finance has published a summary of the International Monetary Fund’s (IMF) annual Article IV assessment of Finland. The assessment expects the recovery and employment to strengthen in 2025 but recommends sustained fiscal consolidation and structural reforms to put the public debt-to-GDP ratio on a clearly declining path, alongside further macroprudential and crisis-management work despite a resilient banking sector. The IMF forecasts GDP growth of 1.5% in 2025 as private investment and consumption recover with lower interest rates and stabilising house prices, with medium-term growth around 1.3%. It estimates the general government deficit widened to 3.7% of GDP in 2024 and projects debt rising to almost 90% of GDP by the end of the forecast period, recommending an annual 0.5% of GDP strengthening of the fiscal position in 2025–2029 through a mix of spending and revenue measures. On financial stability, banks are assessed as well capitalised with strong liquidity, but vulnerabilities include reliance on short-term wholesale funding, sizeable cross-border exposures (notably in the Nordic region and the volatile construction sector) and high household indebtedness, leading the IMF to recommend raising the neutral level of the countercyclical capital buffer above zero and completing the macroprudential toolkit; additional efforts are also flagged for crisis management and non-bank financial institutions. The report also points to education and participation measures, service-sector entry barriers, and stronger carbon sinks given a view that Finland is unlikely to meet its 2035 carbon-neutrality target. The assessment is based on an IMF mission to Finland in October–November 2024, following which an IMF statement was published on 8 November 2024.
Ministry of Finance (Finland) 2025-01-21
Finland's Ministry of Finance publishes IMF assessment recommending 0.5% of GDP annual fiscal strengthening and a higher neutral countercyclical buffer
Finland's Ministry of Finance released the IMF's Article IV assessment, forecasting 1.5% GDP growth in 2025 and recommending fiscal consolidation to reduce the public debt-to-GDP ratio. The IMF advises increasing the countercyclical capital buffer and enhancing the macroprudential toolkit. Additional recommendations include addressing vulnerabilities in short-term wholesale funding, cross-border exposures, and household indebtedness, alongside structural reforms in education, service-sector barriers, and carbon neutrality efforts.