Finland has managed to avoid the excessive deficit procedure despite the expectations of breaching the debt rules of the European Union in 2024. The European Commission decided not to initiate the procedure against the country as it forecasts the breach of the three-percent limit on budget deficit to be temporary, reaching 3.4 percent of GDP in 2024.
Minister of Finance Riikka Purra highlighted the difficult decisions made in April that helped in avoiding the procedure. Finland’s situation stands in contrast to seven other member states facing the procedure due to budget deficit or high government debt levels.
Although there are concerns about rising debt ratios and expenditures outpacing revenue projections, there is hope for economic growth and improvement in the employment situation. With the possibility of modest growth and a boost in exports, Finland is navigating its fiscal challenges cautiously. The Ministry of Finance emphasizes the importance of economic changes in ensuring a stable financial future.
Overall, Finland is treading a fine line between economic stability and potential challenges, with hopes pinned on favorable economic conditions and growth prospects.