Tax authorities report tentative signals of economic recovery in Finland. Tax revenues from retail and construction sectors is on the rise, while domestic demand has been growing for six months, says Matti Luokkanen, a senior adviser at the Tax Administration.
Tax officials say they are positively surprised. So far this year, tax revenues are up by half a billion euros compared to a year earlier. They say this rise has been brought about by people in Finland shopping and building more. In particular, an upswing in construction has brought in more value-added tax. VAT revenues have been accelerating over the past half a year, says Luokkanen.
"Over the past six months, there's been growth of four percent. That's a big number when you compare it to the past two or three years, when the growth percent has been less than one percent," he says. He also sees indicators that industry is perking up.
More investing, more buying
Luokkanen says this year's uptick in tax revenues reflects growth in domestic demand.
"Investments have picked up in construction, and even in industry," he tells Yle. The positive turn in VAT revenues may also – hopefully – indicate that consumption has also risen," Luokkanen notes.
In retail, management at the gigantic S Group agrees with this analysis.
"Yes, certainly for us business has been good this year at least in groceries and everyday consumer items," says Field Director Arttu Laine. He believes that the freeing of shop opening hours has stimulated sales in recent months.
More work, more tax revenue
Tax officials also see positive signals regarding employment. Earned-income taxes paid by individuals have likewise filled state coffers at a faster pace than in early 2015.
"We can say that this rise in tax revenue stems from an improved employment situation. It's still not good, but joblessness is no longer growing at the same rate as before," Luokkanen says.
He declines to make predictions about the national economy, though.
"Of course we can't say anything certain about what's to come, but it's clear that the past six months have been very positive," Luokkanen adds.
Export outlook still bearish
The head of forecasting at the Finance Ministry, Mika Kuismanen, sees the growth in tax revenue as a good sign. For some time it's been clear that domestic demand and investments have turned upward, he says.
"The growth in tax revenue is a small sign that a slight turn in the market has probably taken place," Kuismanen says. However he does not yet see indications of real economic growth.
"The real turnaround will be led by foreign trade," Kuismanen says.
Foreign sales of Finnish products have instead declined recently.
"The global economy does not seem likely to offer Finland much traction in the near future," says Kuismanen.
