Labore’s Economic Forecast 2026–2028: Growth gains promising momentum across the economy

Goods exports and investment in the early part of the year have strengthened Finland’s growth outlook. Labore has also raised its growth forecast for 2027 by 0.4 percentage points since the spring, while its forecast for 2028 remains unchanged. The recovery is nevertheless uneven: residential construction continues to struggle, while rising energy prices and international uncertainty pose risks to growth.

Key forecast figures

• Private consumption will grow by 1.3 per cent in 2026. Growth will strengthen in the coming years as real incomes rise, and employment gradually improves. The forecast also assumes that households will reduce their precautionary saving.
• Investment will grow by 4.4 per cent in 2026. Growth will be supported particularly by data centre projects and defence procurement. The outlook for residential construction remains weak.
• Exports will grow by 4.7 per cent in 2026. Exports will benefit from improving economic conditions in Finland’s trading partners and demand for products from the mechanical engineering and maritime industries.
• The unemployment rate will decline slowly. It is forecast to fall from an average of 10.4 per cent in 2026 to 9.2 per cent in 2028.
• The general government deficit will remain large. In 2026, the deficit will amount to 3.8 per cent of gross domestic product (GDP). Debt will continue to accumulate despite improving economic conditions, and the public debt-to-GDP ratio will rise to 94.5 per cent in 2028.

Improving employment would also support consumption

Although the economy has returned to growth, employment has yet to improve. In the early stages of the recovery, businesses have been able to increase production with their existing workforce. As growth continues, demand for labour is also expected to increase towards the end of this year and during next year.

“Rising real incomes support consumption, but uncertainty about jobs may prompt households to keep saving rather than spending. Improving employment would strengthen confidence and encourage households to spend more,” says Juho Koistinen, Head of Forecasting at Labore.

High energy prices pose a risk to growth

High energy prices could slow growth in Finland’s key export markets. The forecast assumes that the effects of the energy price shock will ease and that monetary policy will not tighten significantly from its current stance.

“For Finland’s exports, the key question is how long high energy prices will weigh on European businesses and reduce demand for capital goods. Lasting peace in the Middle East could strengthen confidence and allow growth to exceed our forecast,” Koistinen says.

Link to the economic forecast