Finnish economists generally support €9 billion budget cuts despite public concerns

The Finnish government’s plans for €9 billion in budget cuts and other adjustments have sparked positive reactions among economic experts, despite public outcry about the severity of these cuts. A survey conducted by Yle indicates that 75% of the economists who responded feel that the scale of the adjustments is appropriate.

Juhana Brotherus, chief economist at Suomen Yrittäjät, expressed that the government’s plan is well-timed and of the right magnitude. The survey was conducted among about twenty experts working in banks, research institutions, and organizations before the Ministry of Finance released its economic forecast.

Finance Minister Riikka Purra commented that stabilizing the debt ratio will be challenging, hinting at the possibility of additional measures in the future. However, no economist in the survey called for immediate further cuts. Interestingly, while experts generally support the adjustments, there is widespread concern regarding their adequacy, as the state is expected to incur an additional debt of €12 billion next year.

Vesa Vihriälä, a visiting researcher at the University of Helsinki, suggested that the proposed measures might be sufficient to halt the growth of the debt ratio by the end of the government’s term. Yet, many specialists believe that the adjustments only meet the minimum requirements.

Skeptical economists are questioning the effectiveness of these adjustments, concerned that significant cuts might impede economic growth. They argue that rather than cutting expenses, stimulating the economy during downturns would be more beneficial.

In summary, while a majority of economists view the government’s proposed austerity measures as necessary, a substantial minority expresses reservations about their potential economic impacts and effectiveness.