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Finland’s economy is emerging from a phase of extremely low growth. Growth in the economy for the full year 2025 will be 0.2%. Growth will rise to 0.8% in 2026 and to 1.7% in 2027. In 2028, the final year of the forecast period, growth will level out at 1.5%.

In this scenario, presented as an alternative to the Bank of Finland’s economic forecast, it is assumed that the economic recovery will be delayed and that growth will be slower than in the baseline scenario. Finland's economy will be almost 2% smaller in 2028 under the alternative scenario than in the baseline scenario.

Finland's public debt is continuing to rise. Turning the debt trajectory onto a declining path more permanently requires time and the entire fiscal policy toolkit. Sustained efforts will produce results if resolute action is taken to achieve the targets while strengthening the economy’s growth potential.

In recent years the Finnish labour market, with declining employment and rising unemployment, has been considerably weaker than the euro area labour market. Both cyclical and structural factors underlie recent labour market developments in Finland and the euro area.

When the Bank of Finland produces forecasts for the Finnish economy, the main tool it uses is Aino, which is a dynamic stochastic general equilibrium (DSGE) model. The article describes the forecasting process, the features of forecasting models and their key role in economic analysis at the Bank of Finland.