Finland's debt-to-GDP ratio will approach 70 percent by 2019 if it does not adopt new measures to improve public finances, the finance ministry warned in a review ahead of next month's general election.
The ministry estimated the economy will grow approximately one percent annually in the next few years, meaning that the next government should cut spending or increase taxes by a total of 6 billion euros by 2019 to drive the debt ratio lower.
It also called for structural reforms and lifted its long-term budget gap estimate to 5 percent of the GDP, or 10 billion euros ($10.67 billion).
"In order to spur growth in the economy, it is essential to renew economic structures, increase competition, improve efficiency of the public sector and refrain from pay rises," the review said. The Finnish economy has contracted three years in a row amid weak demand from Europe and Russia as well as difficulties in its biggest companies.