Bank of Finland long-term forecast projects Finland’s GDP growth peaking at 1.8% in the 2030s before slowing as ageing and weak productivity bite

The Bank of Finland published a long-term forecast warning that population ageing and low productivity growth will weaken Finland’s economic growth and fiscal sustainability. In its baseline scenario for 2024–2075, GDP growth is highest in the 2030s at an average of 1.8% a year, then slows to just over 0.5% from the 2050s onwards, with a low birth rate gradually eroding human capital. The forecast sets out three scenarios for human capital, fixed capital and GDP. In a no-policy-change scenario, human and fixed capital stop growing and then decline, leaving GDP flat in the 2040s and shrinking from the 2050s, with annual net immigration assumed at 18,000. The baseline scenario assumes the share of 25–34-year-olds with a higher education degree rises to 50% by 2035 and annual net immigration averages 27,000; human capital accumulation continues until the 2040s, after which GDP growth becomes reliant on fixed capital. An optimistic scenario assumes 70% of 25–34-year-olds have a higher education degree from 2040 and annual net immigration of 40,000, with average GDP growth of 2% in the 2030s, 1.5% in the 2040s and a little over 1% in 2050–2075.