Strong greetings from VM to the next government: “Finland will not grow out of its debts”

The Ministry of Finance has published a financial review. According to it, economic growth will not be enough to shake off the problems of the public finance deficit in the coming government period. -grow-out-of-debts-3ca9989.jpg” alt=”VM:ltä best wishes to the next government: ”Finland will not grow out of its debts”” />

The Ministry of Finance will publish its latest economic review on Thursday. Saana Säilynojajari.hanska@iltalehti.fiYesterday at 12:05

Director-General of the Ministry of Finance, head of department Mikko Spolander sent greetings to the incoming government at the ministry's press conference on Thursday. He did not address his words directly to the politicians, but reminded of the realities on which the public finances rest in the light of the latest figures.

The budget deficit is predicted to be 10–12 billion euros per year for the years 2024 in the latest financial review of the Ministry of Finance. – 2027. When municipalities and welfare areas are added to the pot, the combined deficit rises to 14–15 billion euros per year.

– There is no shortcut to reducing deficits. Reducing deficits requires that expenditures grow more slowly and incomes grow more quickly than is currently estimated in the calculations. Scales are essential, Spolander said.

– What I'm trying to say is that by fine-tuning spending, taxes or economic structures, the public economy cannot be strengthened by billions.

Next year, the economy is expected to grow by 1.3 percent and in 2025 by 1.6 percent.

Inflation increases public spending

Inflation was slow last year, but this year's high inflation is also reflected in the growth of public expenditures. It is especially reflected in index-linked expenses, such as pensions and unemployment insurance.

On Thursday, at a press conference, financial adviser Jenni Pääkkönen expressed the situation directly. He considered that high debt and increased interest rates pose a risk to the public economy.

– With the information we have about the economic picture, Finland will not grow out of its debts, Pääkkönen summed up.

In the Ministry's figures, we progress along the so-called “unchanged policy career”. It means that no political actions have been taken into account in the forecast, as the decisions will only be made after the parliamentary elections in early April.

The new government will have to solve a question of billions of euros.

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