The Finnish economy is slowly recovering from a recession amid elevated geopolitical tensions and economic uncertainty. To boost growth and productivity and accelerate its green industrial transition, Finland can draw on its abundant renewable electricity and excellence in engineering and innovation, according to a new OECD report.
The latest OECD Economic Survey of Finland projects GDP growing by 0.7% in 2025 and 1.1% in 2026, driven by declining interest rates and improving purchasing power. Inflation is anticipated to remain just below 2%, as rising import costs are partly offset by lower energy prices.
"A pick-up in productivity will strengthen the recovery, though further reforms are needed to boost living standards over the longer term," OECD Director of Country Studies Luiz de Mello said, presenting the Survey in Helsinki alongside Finland's Minister of Finance Riikka Purra. "This will require continuing technological innovation, alleviating shortages of high-skilled labour, and stimulating greater private investment, including in the green industrial transition."
Having stagnated over the past two decades, higher education attainment needs to rise. Low attainment has contributed to labour shortages, most of which concern highly skilled positions. Raising business funding of higher education research and widening the range of shorter specialised post-graduate qualifications would help free up resources to provide more first-entrant places to higher education and boost higher education attainment and productivity growth.
Despite progress in attracting high-skilled talent from abroad, challenges persist. Finland could further expand language programmes, provide more work experience opportunities for foreign students and enhance integration efforts to attract and leverage the potential contribution of high-skilled immigrants to economic growth.
More efforts are needed to raise labour market participation and employment of women with young children, for example through better childcare incentives. This would also help close the large gender wage gap.
Abundant renewable electricity means Finland has more potential than many other OECD countries to take advantage of the green industrial transition. Making better use of EU funding for green investments and reducing skill shortages would help in this regard.
Meeting its ambitious land-use emissions mitigation and biodiversity targets will require improving forest management, better policy measures for biodiversity, and overcoming financing, regulatory and skills barriers to decarbonising industry. Appropriate management of the Finnish Arctic is needed to meet significant challenges including faster rising temperatures than elsewhere, and competing land-use pressures, including from defence, mining, tourism and renewable electricity projects.
