After sluggish growth in 2015, the economy saw a slight recovery in 2016, thanks to private consumption and dynamic investment. In 2017, growth should remain moderate, supported by growth in private investment and exports. Indeed, the industrial sector (25% of GDP) would see a progressive recovery through investment in energy as well as in the forestry and shipbuilding industries. These industries would benefit from a more dynamic foreign demand and the government's policy to improve business competitiveness. Low interest rates favor residential investment and construction, and growth will also be observed in the services sector (75% of employment). Moreover, private consumption would be less dynamic than in previous years, limited by an agreement between social partners providing for slower growth in wages until the end of 2017. In addition, the still high level of unemployment (8.8%), fiscal austerity and the household debt burden (120% of disposable income) would continue to hamper growth in private consumption. However, the purchasing power of households would improve to the extent that real wages would see a slight increase, in a context of still modest inflation (albeit slightly increasing). Dependence on exports in the economy (37% of GDP) and demand from its main trading partners (Russia, Germany and the Nordic countries) could affect the business activity in case of a slowdown in demand in these countries.

In 2017 the government's priority will remain focused on the fight against unemployment and the revival of the industrial sector, which continues to suffer from low competitiveness. A Competitiveness Pact was signed with social partners in late 2016 with the aim of reducing unit labor costs by 4% in 2017. The main measures concern the extension of the annual working time (additional 24 hours without wage compensation), a transfer of a portion of employer charges to employee contributions and wages, which would increase less rapidly. The authorities have nevertheless granted households a reduction in income tax in order to offset rising social security contributions. In addition, the government would invest more in infrastructure, especially in transport. This policy would be funded by budget cuts in education and in R&D and by the reform of the social security system which would see this power transferred to local institutions (economies of scale). Thus, the budget deficit would still be below 3% but public debt would continue to rise slightly, while remaining relatively low compared to other countries in the Eurozone. Meanwhile, the implementation of this policy would have a positive impact on the current account, which would be close-to-balance. Exports would be improve especially in the pharmaceutical, petrochemical and in the forest industry, driven by better competitiveness and an increase in orders. Furthermore, the electronics sector would benefit from the recovery (early 2017) on the smartphones market observed in the Nokia brand, purchased from Microsoft by a Finnish company. Nevertheless, the increase in imports would halt the improvement observed in the current account in 2017, due to a more dynamic domestic demand and a moderate increase in oil prices.

Finnish voters entrusted power to the Centre Party in the parliamentary elections held in April 2015. The coalition government, which also includes the Finns Party (far right) and the National Coalition, the center-right party, holds a comfortable majority in parliament (124 seats out of 200). However this coalition is weak, insofar as the withdrawal of one of the three parties would cause a loss of majority for the government. Moreover, the opposition parties have been strengthened following the unpopularity of the Competitiveness Pact reforms, which aim to reduce unit labor costs and improve competitiveness. The Social Democratic Party even came out ahead according to a poll conducted in October 2016. The government will be judged on the results of its reform plan, particularly in terms of unemployment. The business environment remains very favorable as the country ranks 13th out of 190 in the latest Doing Business report published by the World Bank, with particularly remarkable performance in insolvency settlement.