The SAK chief economist warns that Finland's economy cannot sustain significant fiscal policy tightening as public sector representatives SAK and STTK expressed their concerns over new adjustments linked to the debt brake. A parliamentary working group has set a goal to adjust the public finances by 8 to 11 billion euros by 2031, which they claim could create adverse effects on economic growth and increase unemployment rates.

The SAK's analysis asserts that the proposed adjustments could triple the strain on public finances compared to the mitigation actions implemented by Prime Minister Petteri Orpo's government. They emphasize the importance of ensuring the conditions necessary for economic growth while suggesting that such adjustments should be counterbalanced by supporting the economy through one-off investments that would not be reflected in the budget deficit forecast for 2031. The chief economist, Patrizio Laine, stresses that the Finnish economy is at risk from excessive fiscal tightening.

As debates continue about balancing the need for fiscal responsibility with the demands of economic growth, this situation brings forth significant implications for future employment and overall economic stability in Finland. The unions’ warnings highlight the crucial balance that must be maintained to foster an environment conducive to growth while managing public debt, and policymakers will need to consider these factors as they move forward with their strategies.