Will Orpo's Government Restore Finland to Sustainable Economic Growth?

The previous government of Finland – led by the exceptionally beautiful Prime Minister Sanna Marin (SDP) – was unable to manage Finland's public finances. This became particularly evident after the COVID pandemic was over, and the public sector should have been adjusted to match the available funds.

However, this was not done, and during Marin's government, Finland's public debt rose from 69% of GDP in 2019 to nearly 76%. At the same time, automatic expenditures were built into the state budget – the largest being a new level of administration with elected representatives for wellbeing services – which also forced the new government, led by the uncharismatic Petteri Orpo (NCP), to live on borrowed money.

The current strict Minister of Finance, Riikka Purra (Finns Party), recently commented on the situation. According to her, "The tax-funded bubble is even worse than I thought before taking on these tasks. I often wonder in my office, where protests, shouting, and threats occur under my window, whether the taxpayer really has to pay for all of this. Sometimes for legitimate reasons, and sometimes just because some acquired benefit has to be given up again."

She also criticized the attitude of the left-green opposition, stating that "Instead of constructing even a slightly coherent alternative to the government's economic and fiscal policy, the opposition strikes, hits, and shoots in all directions with every possible means."

Despite everything, Purra still believes that Finland's economy will turn for the better. This, of course, requires bringing public spending under control, as well as the success of Finnish businesses – from small bars to heavy industry – in domestic and international competition.

There have already been a few positive signals in this regard. One example is the order received by a Finnish shipbuilder for a massive Caribbean cruise ship, and another is the better-than-expected success of pharmaceutical company Orion’s new innovation on the market. The forest industry, which is particularly important for the entire economy, is also expected to improve its results within this year.

However, the most important task remains bringing public spending under control. This requires significant changes, especially in healthcare, where the new administrative structure has turned out to be even more expensive than anticipated, and the costly salary agreement implemented during the previous government doesn’t help matters.

It remains to be seen whether Orpo's government will succeed in returning Finland to a path of economic growth, one that hasn’t been seen since before 2009, but is optimistically reflected in the linked graph. 

And in any case, the recovery of the Finnish economy would be welcomed in order to attract highly skilled labor from abroad. Or as Purra stated: "When it comes to real foreign top experts, they will come along with private sector-led economic growth. This creates high value-added jobs that foreigners will also want to pursue."

Previous thoughts on the same topic:
Balancing the Books
The Finnish Minister of Foreign Affairs apologized to the Turkish Minister of Foreign Affairs for the words of the woman who criticized the man who exposed his penis
Finnish horror gallery and reality