27.5.2026

Finland’s economic outlook 2026–2027: A slow recovery, but public finances remain under pressure

According to the European Commission’s Spring 2026 Economic Forecast, the Finnish economy continues to grow slowly. GDP is projected to grow by 0.8% in 2026 and 1.4% in 2027. Domestic demand is the engine of growth, but high unemployment, rising energy costs and the public deficit cast a shadow over the outlook.

Economic growth leans on domestic demand

The Finnish economy grew by just 0.2% in 2025. Growth is expected to strengthen to 0.8% in 2026 and to 1.4% in 2027. Growth is therefore returning, but the recovery remains modest.

In 2026, the economy is supported in particular by domestic demand, services, retail, industrial production and investment. Defence investment, such as the F-35 fighter procurement, and data centre construction support investment in machinery, equipment and infrastructure.

At the same time, the export outlook is weighed down by geopolitical uncertainty, higher energy costs and a slowdown in global trade.

Consumption recovers, but cautiously

Household purchasing power is supported by the wage settlements agreed for 2025–2027, with a combined impact of around 8%.

Consumption growth nevertheless remains cautious. Consumer confidence is still weak, unemployment is high, and uncertainty about the economic outlook keeps the savings rate elevated.

Unemployment remains high

The unemployment rate is projected at 10.1% in 2026, falling to 9.8% in 2027.

Employment is, however, expected to turn upward gradually. A pick-up in the economy increases demand for labour, but the change happens with a lag.

Inflation accelerates in 2026, slows in 2027

Inflation in Finland is projected to rise to 2.4% in 2026. The main drivers are the rise in electricity prices early in the year and higher oil prices.

In 2027, inflation is expected to slow to 1.9% as price pressures ease.

Public finances remain in deficit

Finland’s public finances are still clearly under pressure. The general government deficit is projected to grow to 4.5% of GDP in 2026 and to stay high in 2027 as well.

Public debt keeps rising

Public debt relative to GDP is forecast to grow from 88.5% in 2025 to 91.2% in 2026 and 93.1% in 2027.

Forecast table: Finland’s key economic indicators

Indicator202520262027
GDP growth, %0.20.81.4
Inflation, %1.82.41.9
Unemployment rate, %9.710.19.8
General government deficit, % of GDP-3.4-4.5-4.6
Public debt, % of GDP88.591.293.1
Current account, % of GDP1.30.10.2

What do these economic prospects mean for businesses?

The 2026–2027 outlook is two-sided. The economy is growing, but slowly. Costs remain elevated, the labour market is challenging, and public finances may bring new pressure on taxation and regulation.

For businesses, this particularly highlights the importance of real-time financial data, automation and cash flow forecasting.

Summary

Finland’s economy is returning to growth, but the recovery is modest. In 2026, growth is supported by domestic demand, and in 2027 economic growth strengthens slightly.

The biggest challenges relate to high unemployment, the public deficit and continuing indebtedness.

What about Sweden and Norway?

According to the European Commission, Sweden’s GDP is projected to grow by close to 2% in both 2026 and 2027 (1.8% and 2.2%), inflation is expected to stay below 2%, and public debt remains close to 38% of GDP. Norway’s economy, in turn, is expected to keep growing at roughly its normal pace of around 1.5–1.7%, supported by household purchasing power and an expansionary fiscal policy.

Sources

General