FX.co ★ Finland Eyes Smaller Fiscal Deficit in 2026

Finland's centre-right coalition has reached a consensus on a fiscal plan for 2026, aiming to reduce the budget deficit while maintaining support for economic growth, according to a statement released by the government late Tuesday and reported by Reuters. The anticipated budget deficit is set to decrease to €8.7 billion in the upcoming year, attributed in part to a reduction in transfers to Finland's National Housing Fund, which will decrease to €2.3 billion from the previous €13.2 billion forecasted in 2025. Excluding the housing fund transfer, the deficit for 2026 is expected to be €11.0 billion. Since taking office in 2023, the government has committed to curbing public expenditure in an effort to stabilize the national debt ratio and circumvent potential disciplinary measures from the European Union. The Finnish central bank has highlighted the challenging and gradual nature of the country's economic recovery from recession, with the finance ministry projecting a modest GDP growth of 1% in 2025. Public expenditure in 2026 is forecasted to increase slightly to €90.3 billion, compared to €90.1 billion projected for this year.