Sustainability gap larger than previously projected

According to the Bank of Finland’s estimate, the sustainability gap in Finland’s general government finances is 4.7% relative to GDP. The estimate is a ‘pressure projection’ that quantifies the fiscal adjustment that stabilises the debt-to-GDP ratio over the long term. The most prominent factor affecting the sustainability gap is the ageing population. In addition, the estimate is higher compared with the previous year is due particularly to the weaker cyclical conditions and fiscal outlook for the immediate years ahead.