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Finland’s economy is expanding faster than previously expected as stronger exports and investment support a broader recovery after years of weak growth, according to the Bank of Finland.
The Finnish central bank now forecasts gross domestic product to grow 1.7% in 2026 and 1.6% in 2027. That marks a significant upgrade from its June projections of 0.7% and 1.2%, respectively. Growth for 2025 was also revised higher to 0.8% from an earlier estimate of 0.2%.
Finland has struggled with economic stagnation in recent years as government austerity measures and the impact of Russia’s war in Ukraine weighed on activity. The improved outlook comes ahead of the country’s 2027 parliamentary election.
Bank of Finland Head of Forecasting Juuso Vanhala said economic performance during the first part of 2026 exceeded previous expectations, with rising exports and investment creating conditions for growth to spread across more areas of the economy.
An improving economy is also expected to gradually ease Finland’s high unemployment rate. The central bank forecasts unemployment at 10.4% in 2026, roughly unchanged from current levels, before falling to 9.8% in 2027 and 9.0% in 2028 as demand for workers strengthens.
Inflation, meanwhile, is projected to rise to 2.4% this year, largely because of higher energy prices linked to the conflict in the Middle East. However, the Bank of Finland expects those pressures to be temporary, with inflation slowing to 1.4% in 2027.
Finland’s investment outlook received another boost last week when Alphabet-owned Google announced plans to invest at least €13 billion ($15 billion) in artificial intelligence infrastructure in the country over the next two years. The project represents Google’s largest investment in Europe and could further support Finland’s technology sector, investment activity and economic growth.
The stronger forecasts suggest Finland may finally be moving beyond its prolonged period of stagnation, although elevated unemployment and geopolitical risks remain important challenges for the recovery.
