Country Forecast Finland Updater

  • ID: 2101575
  • November 2015
  • Region: Finland
  • 17 Pages
  • The Economist Intelligence Unit
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Following the general election on April 19th, Finland's new government is led by the Centre Party (KESK) and includes the far-right The Finns (PS) and the centre-right National Coalition Party (Conservatives, or KOK). The three parties hold a comfortable majority in parliament. The prime minister and leader of the KESK, Juha Sipila, based his choice of coalition partners on areas of policy consensus, but in November a stand-off between his party and the KOK over the details of healthcare reform plans almost led to the collapse of the government.

This episode has raised the risks to political stability that already stem from the PS's decision to soften its hardline stance since entering government, notably on immigration policy. The Economist Intelligence Unit expects that growing disenchantment among its supporters will lead to a fracturing of the PS and the replacement of Timo Soini as its leader, prompting the party to leave the government. The coalition partners are likely to respond to the PS's withdrawal by calling a fresh election. Our baseline forecast is therefore that the coalition will fail to last for its full four-year term; we see a high risk of collapse in 2016.

The general government deficit stood at 3.3% of GDP in 2014, its highest level since 1996. Fiscal adjustment is likely to see the deficit reduced to 2.5% of GDP in 2015 and then continuing to narrow before reaching balance in 2019 and turning into a small surplus by the end of the forecast period. The public debt/GDP ratio is likely to peak at 62.7% in 2016, above the EU's Stability and Growth Pact threshold, before falling to around 58% by 2020.

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Country Forecast Finland Updater

Country forecast overview: Highlights

Country forecast overview: Key indicators

Country forecast overview: Business environment rankings

Country forecast overview: Finland's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
The labour market

Fact sheet

Outlook for 2016-20: Political stability

Outlook for 2016-20: Election watch

Outlook for 2016-20: International relations

Outlook for 2016-20: Policy trends

Outlook for 2016-20: Fiscal policy

Outlook for 2016-20: Monetary policy

Outlook for 2016-20: Economic growth

Outlook for 2016-20: Inflation

Outlook for 2016-20: Exchange rates

Outlook for 2016-20: External sector

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data sources and definitions
Global data
Domestic data

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