## Finland: Staff Concluding Statement of the 2026 Article IV Mission _IMF News, November 10, 2025_ ## Source details **Canonical URL:** [Finland: Staff Concluding Statement of the 2026 Article IV Mission](https://www.imf.org/en/news/articles/2025/11/07/cs-finland-staff-concluding-statement-of-the-2026-article-iv-mission) ## Other formats - [Markdown version](/en/news/articles/2025/11/07/cs-finland-staff-concluding-statement-of-the-2026-article-iv-mission/index.md) - [Structured JSON version](/en/news/articles/2025/11/07/cs-finland-staff-concluding-statement-of-the-2026-article-iv-mission/index.json) - [Bundle manifest](/en/news/articles/2025/11/07/cs-finland-staff-concluding-statement-of-the-2026-article-iv-mission/bundle-manifest.json) ## Bibliographic details - Published: November 10, 2025 --- ### Mission, timing, and contacts - IMF team led by Mr. Alex Pienkowski conducted the 2026 Article IV Consultation mission in Helsinki and Tampere during October 28-November 7. - Meetings included Minister of Finance Riikka Purra, Governor Olli Rehn, other senior officials, and representatives from the private sector, banks, labor unions, and other stakeholders. - Publication date: November 10, 2025. ### Macroeconomic outlook and near-term performance - The Finnish economy continues to underperform amid slow productivity growth and persistently weak private demand. - Real GDP growth history and projections: - Contraction in 2023. - Real GDP grew by 0.4 percent in 2024 but slowed again in 2025. - Activity in 2025 is expected to remain subdued, with annual growth projected at ¼ percent. - Output is projected to increase by 1½ percent in both 2026 and 2027. - Inflation: - Inflation has remained contained at around 2 percent. - Headline inflation moderated with falling energy prices offsetting stronger core inflation. - Headline inflation is expected to remain at 2 percent in the medium term. - Drivers and headwinds: - Private consumption dampened by heightened uncertainty, falling house prices, and the increase in interest rates since 2022. - Private investment, including in construction, fell significantly. - Net exports supported growth despite higher tariffs. - Recovery support expected from rising real wages, housing market recovery, and several large investment projects beginning. ### Fiscal developments and risks - Fiscal deterioration: - The fiscal deficit widened by 1.5 percent of GDP, reaching 4.5 percent in 2024. - Despite consolidation efforts, weak revenue growth, higher defense spending, and pressure from health and social services are likely to keep the 2025 deficit broadly unchanged. - Public debt—already exceeding levels observed in Nordic peers—is expected to approach 90 percent of GDP in 2025. - Medium-term fiscal trajectory: - Some welcome fiscal adjustment is expected in 2026 as previous consolidation and the anticipated economic rebound take effect. - The overall fiscal deficit is projected to remain above 3 percent, while debt will approach 95 percent of GDP by the end of the decade. - Larger spending needs and higher long-term interest rates pose risks to public debt and market confidence. - Consolidation recommendation: - Authorities should seek to consolidate by ½ percent of GDP (€1.5 billion) annually, until the fiscal balance is closed and debt begins to decline. - Consolidation measures must be well-targeted and efficient, addressing both revenue and expenditure. - The new national fiscal framework and the Parliamentary Pact for Fiscal Policy provide a cross-party commitment to steady debt reduction over many parliamentary cycles. ### Labor supply, skills, and productivity priorities - Labor market and policy context: - Recent labor market reforms and increased immigration have supported an increase in labor supply. - The government is streamlining the unemployment benefit system and easing labor market regulations to strengthen work incentives. - Tertiary education attainment has stagnated at levels below peer countries. - Policy priorities to bolster productivity: - Increase tertiary education attainment and upskill the labor force. - Adapt active labor market policies to facilitate AI adoption. - Reduce barriers to firm growth and scale-up by reviewing domestic red tape and improving access to funding and investment. - Advocate for reduced barriers to trade within the EU and further European integration, including compromise on energy issues. ### Financial sector resilience and macroprudential policy - Systemic assessment: - The banking system remains resilient with strong capital positions and profitability. - Stress tests indicate banks could withstand a severe economic slowdown. - Vulnerabilities persist from weaker real estate and construction market activity, elevated household debt, and significant cross-country interconnectedness. - Cyber threats have risen, though their impact on financial stability has so far remained contained. - Macroprudential recommendations: - Support preparatory work for a joint Nordic-Baltic banking sector stress test in 2026. - Maintain the systemic risk buffer on credit institutions at 1 percent given structural vulnerabilities. - Gradually phase in a positive neutral rate for the Counter-Cyclical Capital Buffer. - Maintain existing borrower-based measures—particularly loan-to-value limits and loan maturity limits—at current levels. - Incorporate debt-to-income and debt-service to income limits into the policy toolkit. - Maintain a clear macroprudential framework with a well-defined objective to safeguard financial stability. ### Key risks and scenarios - Downside risks are predominant: - External risks: escalating trade tensions and geoeconomic uncertainty. - Domestic risks: slower-than-expected labor market recovery, sharper declines in house prices, further labor productivity weakness. - Fiscal risks: larger spending needs and higher long-term interest rates that could undermine debt sustainability and market confidence. ### Concluding priorities (summarized) - Commit to credible consolidation efforts to lower debt over the medium term. - Enhance productivity by strengthening tertiary education, supporting AI adoption, and reducing trade barriers within the European Union. - Strengthen financial sector resilience by expanding the macro-prudential toolkit, while maintaining existing borrower-based measures. *Finland: Staff Concluding Statement of the 2026 Article IV Mission (IMF), November 10, 2025.* --- ## References - [Finland and the IMF](http://www.imf.org/external/country/FIN/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Mission Concluding Statements](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [Article IV](https://www.imf.org/external/pubs/ft/aa/aa04.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2025/11/07/cs-finland-staff-concluding-statement-of-the-2026-article-iv-mission_