Finnish municipalities recognise need for economic adjustment, survey finds

A majority of Finnish municipalities see a significant or moderate need for economic adjustment, according to a new survey by the Association of Finnish Municipalities (Kuntaliitto).

The association’s spring economic barometer, published Tuesday, reveals that while half of responding municipal finance directors currently rate their financial situation as fairly good, good, or very good, most acknowledge upcoming challenges.

Small municipalities with fewer than 5,000 residents reported the strongest financial positions, while cities with over 100,000 inhabitants faced the weakest outlook. However, projections for the next 12 months suggest a broad decline in financial health.

Minna Punakallio, chief economist at the Association of Finnish Municipalities, cited global economic uncertainty and the collapse of last year’s state subsidy reform as key factors shaping the longer-term outlook.

The survey collected responses from 203 municipal finance directors in March.