Assessment of public finances 2019

Abstract

Sound fiscal policy should be conducted keeping in mind the economy’s long-term challenges. Finland's population structure is becoming increasingly unfavourable on account of its declining working-age population and growing share of the elderly. This imbalance, together with rising age-related expenditure, will create a situation for the public finances where long-term general government expenditure is expected to exceed its revenue. In addition to the aforementioned sustainability gap, sound fiscal policy will prepare for future recessions and negative surprises.