Finland’s new long-term forecast suggests GDP growth will be more subdued

Abstract

An ageing population and weak productivity trend are depressing Finland’s economic growth prospects. The Bank of Finland’s new long-term forecast suggests growth will be around 1.2% per annum in the period 2021–2040, and will slow thereafter. If current trends in population growth and education continue, there is a danger that human capital will start to decline in the 2040s. The trend in human capital can still be influenced through investment in education and more robust incentives for acquiring skills, participating in the labour force and increasing the birth rate. Furthermore, increased immigration of skilled workers would help boost human capital more quickly than policies that relate to the indigenous workforce alone.