# Etla forecasts: the upturn in growth is strengthening and investment is picking up in Finland

**Published:** 2026-09-21  
**Categories:** Latest, News and press releases  
**Tags:** data center, data centre, economic forecast, employment, ETLA, etla economic research, ETLA-WEF, Finland, forecast, GDP, inflation, public debt, unemployment  
**URL:** https://www.etla.fi/en/latest/etla-forecasts-the-upturn-in-growth-is-strengthening-and-investment-is-picking-up-in-finland/

According to the latest forecast by ETLA Economic Research, economic growth in Finland is set to strengthen to 1.7 per cent this year, with projections indicating a steady rise to around two per cent in the following year. This indicates a continued growth trajectory for Finland in the coming years. Investments are expected to play a pivotal role in driving this growth, with a projected increase of over five per cent this year and just over nine per cent next year. The surge in investment is largely attributed to the data centre investments announced by Google, the search engine company. Private consumption is also projected to grow this year, and signs of an upturn in the labour market are expected to become more evident towards the end of the year. However, it should be noted that the unemployment rate is anticipated to rise to a record high before this upturn becomes fully apparent.

Etla’s forecast in brief:

- **Economic growth will strengthen to 1.7 per cent this year, driven by exports, investment and private consumption. For next year, Etla forecasts growth of 1.9 per cent, and in 2028 GDP is forecast to grow by 1.4 per cent.**
- **Goods exports will reach new records. Finland’s export growth is estimated at 3.7 per cent this year and three per cent next year.**
- **Investments will increase across all sectors throughout the forecast period (2026–2028). Public investment is expected to grow at a faster rate than private investment this year, driven by multi-role fighter jets. Next year, investment will be further stimulated by data centres announced by Google, among other factors. This year, investment is projected to increase by 5.4 per cent, with a further growth of over 9 per cent expected next year.**
- **Imports account for a significant proportion of both the fighter jet project and data centre investments, thereby reducing the impact of these investments on growth.**
- **The household savings rate remains high. Private consumption is recovering despite inflationary pressures.**
- **Inflation is rising temporarily. Etla forecasts that inflation will rise to two per cent this year and to roughly the same level next year. In 2028, inflation will fall to 1.2 per cent.**
- **The turnaround in the labour market will be slow: unemployment will begin to ease gradually, and the employment rate will rise slowly. The labour market will pick up next year.**
- **The general government deficit will not fall below three per cent, and the combined deficit of central and local government will be around five per cent of GDP. The debt-to-GDP ratio is expected to rise to over 90 per cent.**
- **The state of the global economy poses a downside risk to the forecast. On the other hand, a stronger recovery in employment and private consumption presents a positive risk to the forecast.**

Despite turbulence in global politics, the Finnish economy was growing briskly at the start of this year and looks set to remain on a growth path despite the crisis in the Middle East. Etla forecasts that Finland’s economic growth will strengthen to 1.7 per cent this year. Growth is supported in particular by exports, investment and private consumption.

Next year, GDP growth is set to accelerate to 1.9 per cent, driven by private investment and consumption, and in 2028 growth is expected to return to around 1.4 per cent.

– “The war in Iran has pushed up prices and costs and forced the ECB to react. However, the Finnish economy appears to be weathering the effects of the war in Iran. Our forecast for the coming years is based on the assumption that traffic through the Strait of Hormuz will return to levels closer to those seen before the war. The situation is far from ideal, but it is not the worst possible outcome for either the Finnish or the global economy,” says Etla’s Chief Economist **Jenni Pääkkönen**.

 !“Finnish economy appears to be weathering the effects of the war in Iran”, says Etla’s Chief Economist Jenni Pääkkönen.

A faster-than-expected rise in interest rates and the escalation of global political crises or the outbreak of new ones pose a risk of a weaker-than-expected outcome. If, on the other hand, employment recovers more quickly and consumers are emboldened to increase their spending faster than anticipated, the economy and public finances will improve more strongly.

 !## **Data centre projects are giving a boost to investment**

This year, investment will provide a clear boost to growth and is forecast to increase by 5.4 per cent. Public investment will grow more strongly than private investment, mainly due to multi-role fighter jets. As these fighter jets are imported, this will dampen the economic impact of investment this year. Public investment is also being boosted by additional spending on R&D.

Next year, investment will grow by just over 9 per cent, with the growth coming mainly from the private sector, including the data centre investments announced by the search engine company Google.

Investment will grow strongly over the forecast period, which will support economic growth, says **Sakari Lähdemäki**, a senior researcher at Etla.

– “Google’s project is extremely large, but the proportion of imports involved is so significant that the impact on GDP will remain moderate. It should be noted, however, that large investment projects have far-reaching effects on the economy, and growth may accelerate even more strongly than forecast”, Lähdemäki estimates.

 !“Google’s project is extremely large, but the proportion of imports involved is so significant that the impact on GDP will remain moderate”, says Sakari Lähdemäki, a senior researcher at Etla.

Growth in Finnish exports is currently being supported by a number of factors, including a robust order book in the industry, enhanced cost competitiveness and the finalisation of shipbuilding projects. Deliveries of data centre equipment, in turn, will boost imports, particularly in 2028.

## **Private consumption is growing, whilst inflation is rising temporarily**

Following the shock at the start of the year, consumer confidence in the economy has improved and, together with strengthening purchasing power, this is supporting private consumption. Etla estimates that private consumption will grow by 1.3 per cent this year, which is the fastest rate of growth since 2021. However, growth in consumption is being held back by rising interest rates and higher living costs. The household savings rate will also remain high.

Price rises in Finland have remained moderate despite the conflict in the Middle East, but accelerating inflation in the rest of the euro area has forced the European Central Bank to raise interest rates. Etla forecasts that inflation (national measurement) in Finland will rise to 2 per cent this year. Next year, inflation will remain at almost the same levels, and in 2028 it will fall to 1.2 per cent.

## **The turnaround in the labour market is slow, but it is on its way**

Economic growth will finally begin to feed through to the labour market towards the end of this year. The turnaround will, however, be slow, and before that happens, unemployment will rise to a record high: the unemployment rate for this year is forecast at 10.5 per cent.

Employment is expected to return to growth next year, whilst unemployment will begin to fall at a moderate pace. This decline will be tempered by a simultaneous increase in the labour force. According to Etla’s forecast, the unemployment rate will not fall below 10 per cent until 2028.

 !## **“Economic policy must respond to the challenges facing public finances”**

The Finnish economy has been growing since 2024, but the real challenge is to sustain long-term economic growth at a rate of at least 2 per cent. This will only be possible if productivity growth in the private sector can be sustainably increased and the public sector reduced and reformed, says Etla’s CEO **Aki Kangasharju**.

– “If policy remains fixated on consolidation, there will be no resources left for sufficient growth-promoting measures. We must invest heavily in growth, even if it means relaxing the debt brake. If relaxing the debt brake cannot be channelled entirely into growth measures, the focus must be on fiscal consolidation. However, this will not lay the foundations for continued economic growth once the current upturn has passed”, emphasises Kangasharju.

 !“We must invest heavily in growth, even if it means relaxing the debt brake”, says Etla’s CEO Aki Kangasharju.

Central and local government will run deep deficits in the coming years. Central government expenditure is being driven up in particular by defence and interest expenditure. The general government deficit is large and will not fall below three per cent throughout the forecast period.

The debt-to-GDP ratio will rise above 90 per cent this year and shows no signs of stabilising.

– “As things stand, the general government deficit is projected to be 3.7 per cent of GDP in 2028. The road to achieving the deficit of less than three per cent required by EU rules is a long one, and this target cannot be reached without further adjustment measures or significantly faster growth in tax revenue”, says Jenni Pääkkönen, Chief Economist at Etla

Finland will only be granted an extension by the EU to correct the excessive deficit if we remain on the corrective net expenditure path. There is a real risk that Finland will deviate from that path as early as next year, Pääkkönen assesses.

 !Please click on the link below to access the recording of the launch event (in Finnish) on 17 September 2026.

[Economic Outlook, launch event](https://youtu.be/TafjS2whzyk?si=M4Y45reQFty8hb0D)

*The online version of ‘Economic Outlook: Autumn 2026’ (in Finnish) is available at* [*suhdanne.fi*](https://www.suhdanne.fi/)*. All figures and tables from the online version can also be downloaded separately from the website.*

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