Quarterly Review Q3/2026

Summary: 

– Long-term funding operations for 2026 are well advanced with all the euro-denominated supply in syndicated form completed.
– Auction dates for Q4 have been published.
– In the government’s latest supplementary budget proposal for 2026, the net borrowing requirement was revised to EUR 13.254 billion, which implies gross borrowing of EUR 44.396 billion.
– Economic forecasts have been revised upwards post-summer as Finnish economy grew broadly in the first half of the year. GDP is expected to grow by 1.6% in 2026, 1.8% in 2027 and 1.5% in 2028.

The Crowne Bridges (“Kruunuvuorensilta”), is Finland’s longest bridge that connects the Kruunuvuorenranta area in Laajasalo to Korkeasaari island. It was opened to pedestrians and cyclists in spring 2026. Photo: Helsinki Partners.

Outlook for the Finnish economy and public finances 

The GDP growth outlook has improved significantly in recent months, supported by a broad-based economic recovery that took hold around the turn of the year. The economic recovery is reflected in many sectors of the economy, and the outlook has brightened in both companies and households. Thus far, the negative impacts of the US trade policy and the crisis in the Middle East have remained less severe than feared. The Ministry of Finance forecasts GDP growth of 1.6% in 2026, 1.8% in 2027 and 1.5% in 2028, supported by exports, investment and private consumption.

Exports have performed strongly, benefiting from global trade growth. Robust order books, particularly in the industrial sector, suggest that this momentum is likely to continue into next year. Investment growth is being driven by data centre projects, defence procurement and increased R&D spending. Improving consumer confidence is expected to support a recovery in private consumption this year, following several weak years during which households have built up substantial savings.

Though the stronger growth outlook provides some support to public finances, the upturn will not be sufficient to correct the structural imbalance affecting general government finances. The general government deficit is projected at 4.2% of GDP in 2026 and 4.5% in 2027, reflecting higher defence expenditure and persistent structural spending pressures. General government debt will reach 90% of GDP in 2026.*

As previously communicated, EU fiscal rules require Finland to strengthen its public finances in the coming years. Moreover, the national law on fiscal policy, aimed at debt reduction, was passed last year with broad cross‑party commitment. Finland will hold parliamentary elections in spring 2027, and fiscal adjustment will continue during the 2027–2031 term. In December, the Parliamentary Working Group on Fiscal Policy will agree on the government-term target for 2031, which will determine the required fiscal adjustment in billions. Earlier this year, the Working Group set this target preliminarily to a combined central and local government deficit of 2–2.5% of GDP.

Finnish economy is expected to grow by 1.6% in 2026 and 1.8% in 2027. Source: Ministry of Finance

Source: Ministry of Finance: Economic Survey, Autumn 2026

Review of treasury operations by the State Treasury, July to September 2026

On 19th August 2026, the Republic of Finland successfully launched a new EUR 4 billion RFGB benchmark due 15 April 2033. The bond was priced at 15 bps over mid-swaps, and the re-offer yield at issue was 3.31%. The syndication attracted solid demand from over 120 investors with the final order book closing more than EUR 11 billion. A broad mix of investors participated in the deal, led by central banks and official institutions at 43%. Geographic distribution for the new bond was well balanced across Asia & ME, Benelux, the Nordics and UK.

During Q3, the Republic of Finland issued debt in under its EMTN programme in Swedish krona (SEK), Norwegian krone (NOK) and in Swiss franc (CHF). The CHF issuance, sized at 125 million, was the Republic of Finland’s first in the Swiss franc market since 1997.

In Q3, the Republic of Finland conducted bond and Treasury bill auctions. Auction results are summarised below. These include two optional reverse inquiry (ORI) auctions on 27 August and 24 September to support the secondary market liquidity of off-the-run bonds.

Near-term outlook for the period of October to December 2026

The government’s third supplementary budget proposal for 2026 (dated 22 September) indicates a net borrowing requirement of EUR 13.254 billion which implies gross borrowing of EUR 44.396 billion. Long-term funding operations for 2026 are well advanced with all the euro-denominated supply in syndicated form completed.

To complete the long-term funding requirement for the year, two more tap auctions of existing euro benchmark bond lines as well as an ORI auction are expected to take place in Q4. The next bond auction will take place on 20 October. Further details on the auction and an updated auction calendar are published on: Serial bond auctions.

Bonds may continue to be issued under the EMTN programme to complement funding raised through euro benchmark bonds, subject to market conditions.

The next auctions of euro-denominated Treasury bills are expected to take place on 13 October and 10 November. The auctions will be arranged in the Bloomberg Auction System and are open to the RFTB dealer group. Further information and a quarterly updated auction calendar will be published on: Treasury bill auctions.

In addition to Treasury bill auctions, a tap issuance window for bills is likely to open during the last quarter of the year. The timing of the Treasury bill issuance is subject to the liquidity position and refinancing needs of the central government. Treasury bills are issued in euros and US dollars.

The next Quarterly Review will be published on 18 December 2026.

Further information: Director of Finance Anu Sammallahti, tel. +358 295 50 2575, at Treasury Front Office, firstname.surname@statetreasury.fi