According to preliminary data, Finland's gross domestic product in 2025 will not grow much from the previous year. Based on monthly data, the economy began to grow again at the end of last year, and it will recover to an average growth rate of 1.5 per cent in the following years.
"The biggest reason for the slower than previously predicted economic recovery is a more cautious estimate of the decline in the household saving rate. In summary, we can say that exports and investments are developing well, but consumption is recovering slowly," says Reijo Heiskanen, Chief Economist at OP Pohjola.
Exports grew by just over three per cent in 2025, and the pace will remain good in 2026–27. As economic growth in northern Europe strengthens, export demand will recover faster than global economic growth. In addition, improved cost competitiveness and orders in the pipeline will support export development. The risk is an increase in trade barriers.
Saving rate high
Private consumption stagnated in 2025. Consumption lagged behind income growth, and the saving rate rose. In 2026–27, the increase in real disposable income will enable consumption to recover. The saving rate is expected to decline slightly as concerns about unemployment subside, and households adjust to changed interest rates.
The saving rate in Finland is twice as high as the average of recent decades. The forecast level is the same as in 2019, before the fluctuations caused by the coronavirus pandemic.
Following the large fluctuations in recent years, the saving rate reflects greater uncertainty than usual. It is possible that the saving rate will remain permanently high, due to ageing, for example. This limits the cyclical recovery but may increase production potential in the longer term.
Investments will grow rapidly in 2026. Private investment will achieve a high pace, and public investment is increasing due to increased defence spending. Public investments will mainly be channelled into imports, so the impact on GDP will be minimal.
In the coming years, inflation will remain slightly below two per cent, which will support better development of cost competitiveness and purchasing power.
Employment began to grow at the end of last year, which will strengthen during the current year. However, unemployment rose more than expected due to the increase in labour supply. In 2026, the supply of work will still be abundant. The unemployment rate will remain relatively high, although it will start to decline.
The economy's financing balance will improve slightly as the private sector saves less, and the public-sector deficit decreases. The public debt ratio will still increase.
"From the perspective of future economic growth, measures that reduce public debt and private-sector saving are more than welcome. However, economic growth cannot be relied on to balance the public sector, as only a small part of the deficit is cyclical in nature," Heiskanen states.
The Finnish economy's cyclical ups and downs are typically sharp, so the economy may recover more strongly if the saving rate falls faster than expected, for example. Similarly, uncertainty and setbacks in export markets may hinder economic recovery.
Global economy at a steady pace despite bumps
Global economic growth reached almost the long-term average in 2025, despite strongly fluctuating economic uncertainty. Confidence in the economy improved in the second half of the year.
The trade policy negotiations that have fuelled uncertainty are partly incomplete, and the risk of higher tariffs than previously agreed for some European countries has increased. However, the basic forecast for the global economy is stable for the next few years.
In 2025, the US economy grew almost at the average rate of recent decades, despite turbulence during the year. The balance of the US economy is expected to improve when the moderation of inflation allows interest rates to fall, and the labour market strengthens. The financing balance of the economy, measured by the public deficit and the current account, will remain poor. The risks to economic development point in a weaker direction. Some of the predictive indicators are still weak, trade barriers may increase, and the balance of the economy does not allow for a more sustainable strong economic upswing.
The eurozone economy recovered to its long-term average pace in 2025, driven by southern Europe. In 2026, economic growth will continue to be moderate and will focus more on northern Europe than in recent years as economic growth recovers.
Inflation in the euro area will slow to just under two per cent, which is in line with the European Central Bank’s inflation target. The European Central Bank remains on watch, and the market expects interest rates to be quite stable.