By Terhi Kinnunen
HELSINKI, April 7 (Reuters) - Finland's economy will return to slow growth this year and the export-dependent country needs a sustainability plan to boost its economy, the Organisation for Economic Co-operation and Development said on Wednesday.
The OECD warned in its country review that the strong stimulus the Finnish government used to counter the recession, including tax cuts, revealed structural weaknesses in the economy and was eroding its fiscal position fast.
The organisation urged the Finnish government to draw up a plan -- including lengthening Finns' working careers, cutting government spending and hiking taxes -- to restore its finances.
'The government should endeavour to broaden tax bases and raise beneficial taxes, while holding off from raising them on corporations or labour,' it said.
OECD repeated November forecasts for a general government financial deficit of 4.8 percent of gross domestic product (GDP) this year, widening further to 5.2 percent in 2010.
It urged Finland to trim 'generous' unemployment benefits, raise the minimum retirement age, and tighten criteria for disability pensions to bring younger and older people back into the workforce.
While the report echoed comments by the Finance Ministry last week on the need to bridge the gap in public finances, it painted a slightly gloomier picture of economic growth.
The OECD kept its forecasts for Finnish GDP to climb by a slight 0.4 percent this year, and a further 2.4 percent in 2011.
'A mild economic recovery is projected over the next two years,' it said.
The Finnish Finance Ministry said last week it expected GDP to grow by 1.1 percent this year as exports and consumer spending pick up, and 2.1 percent in 2011.
(Additional reporting by Eva Lamppu; Editing by Tarmo Virki/Ruth Pitchford) Keywords: FINLAND OECD/ (terhi.kinnunen@reuters.com; +358-9-680 50 243; Reuters Messaging: terhi.kinnunen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HELSINKI, April 7 (Reuters) - Finland's economy will return to slow growth this year and the export-dependent country needs a sustainability plan to boost its economy, the Organisation for Economic Co-operation and Development said on Wednesday.
The OECD warned in its country review that the strong stimulus the Finnish government used to counter the recession, including tax cuts, revealed structural weaknesses in the economy and was eroding its fiscal position fast.
The organisation urged the Finnish government to draw up a plan -- including lengthening Finns' working careers, cutting government spending and hiking taxes -- to restore its finances.
'The government should endeavour to broaden tax bases and raise beneficial taxes, while holding off from raising them on corporations or labour,' it said.
OECD repeated November forecasts for a general government financial deficit of 4.8 percent of gross domestic product (GDP) this year, widening further to 5.2 percent in 2010.
It urged Finland to trim 'generous' unemployment benefits, raise the minimum retirement age, and tighten criteria for disability pensions to bring younger and older people back into the workforce.
While the report echoed comments by the Finance Ministry last week on the need to bridge the gap in public finances, it painted a slightly gloomier picture of economic growth.
The OECD kept its forecasts for Finnish GDP to climb by a slight 0.4 percent this year, and a further 2.4 percent in 2011.
'A mild economic recovery is projected over the next two years,' it said.
The Finnish Finance Ministry said last week it expected GDP to grow by 1.1 percent this year as exports and consumer spending pick up, and 2.1 percent in 2011.
(Additional reporting by Eva Lamppu; Editing by Tarmo Virki/Ruth Pitchford) Keywords: FINLAND OECD/ (terhi.kinnunen@reuters.com; +358-9-680 50 243; Reuters Messaging: terhi.kinnunen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.