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Country Profiles

Financial Outlook

Finland has one of the best records on public sector debt in the European Union and, as far as 2013 was concerned, one of the worst-performing economies in the Nordic region. The country’s state debt is set for a modest increase in 2014 according to the budget, while the financial deficit will show an improvement of some €0.4 billion by comparison with 2013. Finland’s debt to GDP ratio stood at 53% in 2012, putting it well within the European Union’s ceiling of 60%. This was a major factor cited by the credit ratings agency Fitch in renewing the country’s triple-A credit rating. In August 2013 the six-party coalition government agreed a €9 billion, three-year plan to boost employment and productivity to help the country to maintain its welfare system for an ageing population. Government analysis revealed a 4.7% of GDP “sustainability gap” between what the country will need to spend and the revenues that would accrue if GDP growth is not boosted. In April 2014 the ratings agency Standard & Poor’s cut its forecasts for Finland’s growth for the period from 2014 to 2016 to 1%, down from 1.4%. The country’s unit labor costs are 15% higher than in Germany, and the government is likely to breach the European Union’s 60% of GDP ceiling for public sector debt by 2015 unless current measures to boost the economy are successful.

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Further reading on Finland

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