Finland: Structural reforms needed to boost growth and employment | WPN World People News

Finland enjoys a high level of income and well-being, but the economy has weakened and new reforms will be necessary to restart growth, boost productivity increase employment and restore competitiveness, according to the latest OECD Economic Survey of Finland.

The Survey, presented in Helsinki Thursay by OECD Deputy Secretary-General Mari Kiviniemi, OECD Chief Economist Catherine L. Mann and Finland’s Minister of Finance Alexander Stubb, shows that the Finnish economy has been hard hit by the global downturn, with activity falling in critical sectors, employment in decline and weakening public finances. It calls for new structural reforms to raise growth and employment.

“Finland has made strong economic progress over the past decades, which is reflected in the country’s high living standards and enviable levels of well-being, Ms Kiviniemi said. “In the past few years the Finnish economy has been hit by specific shocks and this, combined with internal factors, means that there are many challenges going forward. Reviving productivity and increasing employment are essential to strengthen the economy, stabilise public debt and contain government spending, which is being pushed up by population ageing and is among the highest in the OECD.”

The Survey suggests that Finland take immediate steps toward the consolidation of public finances, but recommends a gradual adjustment to preserve the incipient recovery. Boosting productivity growth, by improving framework conditions and supporting innovation, will be necessary to raise living standards and well-being for all. The Survey recommends that the government push forward ambitious structural reform plans, notably to ease product market regulations covering retail trade, transport and construction.

Enhanced policies are needed to boost start-up creation and promote the growth of young firms, while more can be done to improve co-operation between business and universities. Further efforts to raise employment, through greater labour market flexibility, increased focus on active labour market policies and investment in workers’ skills can boost inclusive growth, according to the Survey.

Source: Organization for Economic Co-operation and Development