The International Monetary Fund (IMF) recommends further adjustments to public finances and continued structural reforms for Finland, according to a statement published by the IMF on Friday.
The IMF said that attention should be given to the tax treatment of venture capital funding and rebates associated with investment spending by firms, said the Ministry of Finance in a press release referring to the statement.
Focus should also be on potential barriers to entry and excessive regulation in the service sector, said the IMF.
It urged Finland to continue structural reforms to support business innovation and growth. Slow productivity growth is a particular problem for Finland.
The IMF commended the adjustment measures undertaken by the Government last April.
However, the IMF saw a need for greater fiscal adjustments in order to stabilise and reduce the general government debt-to-GDP ratio over the medium term.
Additional measures would be needed especially in 2026 and beyond to put debt on a firm downward trajectory.
The IMF identified a need for the public sector to strengthen its revenue base.
According to the IMF, growing costs of health and social services, increased defence expenditure and costs associated with immigration pushed the deficit higher.
Minister of Finance Riikka Purra considers it important that external experts evaluate Finland's economy. Finland's fiscal situation is challenging.
“The Government is committed to the adjustment measures it has already decided on. We are monitoring the situation and will assess the need for further measures in the mid-term policy review session next spring,” Purra said.
She noted that the Government has implemented growth measures and structural reforms, for example in the labour market. These measures and reforms will support economic growth, which will make it easier to balance public finances.
“The effects of growth measures and structural reforms will take time to become visible. The Government is also developing new measures. We have established the Room for Growth expert group to identify additional measures,” the Minister added.
The IMF issues statements on all its member countries as part of its country monitoring activities.
The statement is based on assessments by IMF experts and on discussions they have had with Finnish authorities, labour market organisations, financial institutions, research institutes and other organisations. The IMF will publish its full report early next year.
- IMF
- Structural reforms
- Finland
Source: www.dailyfinland.fi
