Finland’s economic output grew by 2.3 per cent in August compared with a year earlier, according to Statistics Finland’s monthly indicator, adjusted for differences in working days. Output also increased by 0.3 per cent from July after seasonal adjustment.
The stronger performance has prompted economists to raise their forecasts. In September, the Bank of Finland more than doubled its projection for full-year GDP growth in 2026, from 0.7 per cent to 1.7 per cent.
Some banks are more optimistic. OP Pohjola’s August forecast projected growth of 2 per cent in both 2026 and 2027. S-Bank’s latest forecast, published on 6 October, puts growth at 1.6 per cent this year and 2 per cent next year. These are full-year projections, distinct from the monthly output figures.
Revised statistics have also improved the picture of the preceding years. Finland’s GDP grew by 0.8 per cent in 2025, and the Ministry of Finance says the recovery began earlier than previous estimates suggested.
Exports and investment drive the upturn
Exports have been the main driver of growth, according to the Bank of Finland. Businesses are also increasing investment in machinery and equipment, while data centre projects are supporting activity beyond the export sector.
Figures released by Statistics Finland on 8 October showed that the value of new manufacturing orders rose by 18.1 per cent in August from a year earlier. The metal industry led the increase, with orders up 24.3 per cent, although the agency cautions that large individual orders can cause substantial monthly fluctuations.
“The foundations for growth in Finland’s economy are now considerably stronger than we estimated in early summer,” S-Bank economist Janne Ronkanen said in the bank’s October forecast.
Defence procurement and the energy transition are also increasing investment, according to the Ministry of Finance. However, imported military equipment has a limited direct effect on domestic production. Housing construction remains weak, with the ministry expecting recovery to begin in 2027.
Households and jobs are recovering more slowly
The improvement is not yet being felt equally across the economy. S-Bank says consumer confidence has strengthened and households have larger financial buffers, but spending is recovering slowly. Higher interest costs continue to discourage major purchases.
Unemployment also remains high. The Bank of Finland forecasts an unemployment rate of 10.4 per cent for 2026, falling to 9.8 per cent in 2027 as stronger activity gradually increases demand for workers.
Faster growth will not, by itself, resolve Finland’s public finance problems. The Ministry of Finance’s autumn forecast still puts the general government deficit at 4.2 per cent of GDP this year, with public debt reaching around 90 per cent of GDP.
The war in Iran remains a major risk to the outlook through energy prices and uncertainty. The Bank of Finland warns that a prolonged energy shock could weaken spending, exports and investment. Conversely, stronger-than-expected business investment and a faster recovery in household spending could lift growth beyond its current forecast.