The Finnish Government in March laid down its economic policy decisions covering the period 2013–2016.
— The most significant decisions made concern Finland’s future, which can only be built in a sound economy, says Ministerial Adviser Juha Majanen from the Ministry of Finance.
The central government’s adjustment measures to limit expenditure and impose tax hikes, which together correspond to a net amount of EUR 2.4 billion at 2015 levels, will stem the growing debt-to-GDP ratio and turn it around by the end of the period.
— The central government’s deficit will decrease from EUR 7 billion this year to around EUR 2.6 billion by the end of the budget planning period. If we include the adjustment measures that were agreed on last autumn, the balancing measures amount to altogether nearly EUR 5 billion at 2015 levels. These decisions reflect the government’s ability to commit to the targets.
Potential for growth exists
In addition to the immediate adjustment measures, other key issues for Finland’s future include raising the employing rate and implementing structural measures that will increase long-term sustainability. When it comes to raising the employment rate, for instance, Majanen sees potential in increasing the supply of workforce.
He also sees major growth potential in terms of improving how the markets operate. As a third proposal, Majanen suggests considerable investments in youth employment and advancing studies.
— The measures and procedures contained in the government’s structural policy and the related labour market organisation agreement are focused in the right direction and will have definite positive impacts on, among other things, lengthening careers. Some of the measures will still undoubtedly require follow-up preparations before their effects can be seen.
Sights set on AAA rating
The government’s objective is not only to clearly reduce the state’s debt-to-GDP ratio, but also to retain Finland’s current AAA credit rating.
— It is essential for investors to see that Finland is taking the necessary measures. The government was able to decide on additional adjustment measures required by its programme. Finland can control its rather moderate debt ratio and decisively stabilise its economy.
— We are also implementing structural reforms that will increase our preconditions for sustainability and growth for the longer term. The framework decision also encompasses measures that will boost innovation and companies’ operating requirements, which will create good conditions for the development and internationalisation of business and for improving terms of trade.
The outlook for business and trade is now, for the most part, bright.
— The central issue is the gradual stabilisation of the financial markets and the euro zone. Growth in the export markets of China and Russia also contributes to the optimism.