The government has said it estimates that Finland will need to take on 11.5 billion euros in new debt next year, upgrading an earlier ten-billion-euro forecast.
This means Finland is accumulating debt at the same rate as the previous government, which dealt with the pandemic as well as the war in Ukraine that accelerated inflation due to rising energy prices.
Speaking on Yle TV1’s Saturday chat show, Ykkösaamu, Finance Minister Riikka Purra (Finns) blamed the continued debt accumulation on the policies of the previous government, highlighting rising borrowing costs.
“Rapid growth in the state’s interest expenses are a key factor in next year’s budget deficit,” she told Yle.
Budget deficits accrued over several electoral terms have swelled central government debt to some 150 billion euros.
“The economic policy of the previous government was based on an illusion of unlimited resources afforded by a zero-interest-rate world,” the Finns Party leader said.
Rising social and healthcare costs are also piling on the funding pressure, according to Purra, who cited the country’s aging population as a main factor in this equation.
The finance minister said the government would cut expenditures by around 700 million euros next year. That said, people in Finland can expect to see more public spending cuts and tax increases.
“In the coming years, the government will continue to take steps to restore the country’s financial health,” she said, adding that “structural reforms will create incentives for employment.”
Source: Yle
