HELSINKI (Reuters) -The Finnish government on Thursday raised its 2023 fiscal spending forecast compared to one month ago to help Finns deal with financial struggles brought on by rising energy bills and other inflation.
Rising prices and the European energy crisis turned the Finnish budget talks in just under a month from a goal of tightening public spending after the pandemic to finding ways to ease inflation struggles.
“The good economic growth we still had at hand in the beginning of the year now threatens to slow down significantly next year,” Finance Minister Annika Saarikko told a news conference.
She added the economic distress could become deeper than estimated and even result in a recession.
The government proposed public spending of 80.5 billion euros ($80.6 billion) in 2023, up from 79.5 billion suggested by the finance ministry a month ago.
The budget deficit for next year is now seen at 8.1 billion euros instead of the 6.3 billion planned originally.
The government said it would cut the electricity tax to 10% from 24% and support purchasing power by compensating high bills with tax deductions and added social security payments.
($1 = 0.9985 euros)
(Reporting by Essi Lehto, editing by Terje Solsvik)
