Government set to miss employment targets as economy slows

The government set a benchmark of 75% employment rates - but the latest economic forecast says the target won't be met.

File photo: economy, finance, business and banking / Credit: iStock Photo

The Finnish government is set to miss one of its flagship economic benchmarks of hitting a 75% employment rate.

A new autumn economic outlook predicts that a slowdown in economic growth will gradually weaken employment growth as well, with the employment rate only hitting 73.4% by 2021.

This is bad news for the coalition government lead by Antti Rinne (SDP) who had hoped the surprise employment growth trend from the previous government of Juha Sipilä would continue. They have pledged efforts to keep job growth vibrant.

“There’s been almost no employment growth since last December” says Olli Kärkkäinen, an economist with Nordea Bank, who says he was “pleasantly surprised” when the Sipilä government hit their own target of 72% employment earlier this year.

“It jumped quite quickly at the end of Sipilä’s term, but now it looks like we won’t be seeing any employment growth coming from global economic growth” Kärkkäinen tells News Now Finland.

Economist Kärkkäinen says any employment growth in the coming years “will have to reply mainly on the reforms the government will be able to do.”

Some positive economic news

It’s not all gloom in the new autumn economic report.

The report forecasts a positive short-term outlook for Finland’s economy, with economic growth sustained by domestic demand in the coming years.

Public consumption and investments will contribute markedly to GDP growth, especially in 2020