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Finland’s job market improving “exceptionally quickly”

Employment is growing at a rate "not seen for many years" in Finland, says the finance ministry. Growth is expected to remain steady for years to come.

Ihmisiä liukuportaissa.
Going up? Image: Henrietta Hassinen / Yle

The Finnish economy is on track for growth of 2.6 percent this year, the Finance Ministry said on Friday. The ministry’s number-crunchers have slightly raised their growth prognosis since the previous one, issued in December. At that point they predicted the economy would expand by 2.4 percent in 2018.

According to the latest forecast, the economy is set to grow by more than two percent annually in the next few years, followed by slower growth of less than 1.5 percent.

Jobs picture brightening

The ministry says that employment has climbed “exceptionally quickly” since late last year. As a result, some 71 percent of workers now have jobs – within shouting distance of the 72 percent mark targeted by Prime Minister Juha Sipilä's government before it leaves office next spring. When the centre-right cabinet took office nearly three years ago, the employment rate was around 68 percent.

The report calls for continued improvement on the jobs front, with the employment rate edging up to 72.5 percent by 2020.

“With this continued strong growth, the demand for labour is rising and employment is growing at a rate not seen for many years,” it says.

Slower growth in disposable income

The growth in private consumption is accelerating this year thanks to higher earnings and employment. However, the report warns that slower growth in real disposable income will put a crimp in household consumer demand.

The Economic Survey also includes a rosy outlook for the public-sector economy, saying that it will become healthier thanks to the improvement in the broader economy and the job market, coupled with moves to rein in spending. The state and local government economy will balance and perhaps even move into surplus by 2020, following a decade of deficits, it says.

“Thanks to the higher rate of employment, the outlook for public finances is more favourable than previously forecast,” says Director General Mikko Spolander, adding that “this provides a firm basis for continuing the efforts to raise employment further.”

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