Fiscal sustainability projections for Finland

Abstract

Finland has substantial problems with fiscal sustainability. The weak economic situation in the next few years, combined with economic growth that will remain subdued also in the long term and rising expenditure pressures denote a considerable need to strengthen the financial balance of both central and local government. Higher immigration would reduce these needs, but could not be a decisive factor. Faster output growth would ease the situation of the earningsrelated pension funds. A rise in the price of public services is a particular threat to the sustainability of the public finances.