Influence and cooperation
The Bank of Finland’s influence is based on expertise and research. The Bank takes a position on domestic and global economic issues as an independent institution.
The objectives of the Bank of Finland’s statements relating to economic policy are price stability, balanced economic growth and financial stability.
In recent years, climate change mitigation has become a key issue.
Finland’s public finances have improved but remain in deficit
In 2019, the Bank of Finland emphasised the importance of fiscal space and balanced cost developments.
The Finnish economy is still going through a period of transition in which it has to adjust to structural realignments stemming from an ageing population and the shocks to the economy suffered since 2007.
Finland’s public finances are in a better condition than five years ago, but remain in deficit. The long-term outlook for the public finances would be eased if a higher proportion than now of the working-age population were in work and labour productivity were to increase. The downward trend in the level of educational attainment among young adults is exceptional in international comparison and concerning from a Finnish perspective.
Despite the slower pace, conditions are favourable for continued economic growth in Finland
In 2019, the Bank of Finland published two extensive macroeconomic forecasts for the Finnish economy. These suggested that Finland’s economic boom was subsiding and growth was losing momentum. Nevertheless, the conditions for continued growth are favourable. Domestic demand will be the main driver of economic growth in Finland in the immediate years ahead.
As monetary policy measures affect inflation with a time lag, forecasts are pivotal in monetary policy preparation and implementation.
The Bank of Finland draws up its forecasts for the Finnish economy using the Aino model as its main forecasting tool. The Aino model simulates the Finnish economy.
The Bank of Finland is a respected international partner
The Bank of Finland is an influential international actor. The Bank is responsible for Finland’s relations with the International Monetary Fund (IMF) and is a member of the EU’s Economic and Financial Committee (EFC).
As in previous years, in 2019, the Bank of Finland maintained close contacts with other Nordic countries and, for example, the Baltic central banks. Training cooperation with the Bank of Russia continued.
In 2019, the Bank of Finland’s research articles were extensively published in international journals.