About the model

What this is

A hobby project that calculates general government revenue, expenditure, fiscal balance and debt up to 2040, and shows how decisions would change them. Every assumption is visible and adjustable.

What this is not

This is not an official model or forecast. The results are estimates whose uncertainty grows over time. Please don't present them as calculations of the Ministry of Finance or any authority.

How the calculation works

The base year (2025) is Statistics Finland's national accounts: revenue, expenditure, taxes and debt match the published totals.
Each revenue and spending line grows every year with its own driver: taxes with GDP, pensions with the number of people aged 65+ and the pension index, health spending with ageing and wages, and so on.
Up to 2030 the current path is aligned with the Ministry of Finance forecast through a visible calibration line. After that the model's own assumptions apply.
Interest is calculated from the debt: the average interest rate approaches the market rate as debt is refinanced.

Limitations

Growth and supply-side effects are optional and off by default, because economists disagree about their size. Indirect cause-and-effect effects (for example the cost of longer care queues) are included as assumptions you can switch off, adjust or add yourself.
Some assumptions are estimates that don't have a source yet. They are marked with low confidence and a note.
The tax figures are direct (static) effects. Behavioural effects – for example changes in consumption or tax planning – are included as separate cause-and-effect effects, of which the disputed ones are off by default.
On the current path the deficit narrows slightly after 2030, mainly because there are fewer children and education spending falls. In this calculation education spending falls about twice as fast as in the EU Ageing Report, and in reality the fall may be slower (schools' fixed costs), so this improvement is probably somewhat too optimistic.
For comparison: in the Economic Policy Council's assessment public debt rises to about 118% of GDP by 2040 if no new decisions are made after 2028. This calculation's current path is of the same order.

Glossary

The site's terms, briefly and in everyday language. The simulator shows the same explanations behind the ⓘ signs.

GDP (gross domestic product): The total value of all goods and services produced in Finland in a year – roughly the whole country's annual income. About €280 billion in 2025.
% of GDP: A figure compared with the whole country's annual income. This makes different years comparable, as prices and the economy grow. E.g. debt of 90% of GDP means the debt equals 90% of one year's total income.
Public debt: All the debt taken by central government, municipalities, wellbeing services counties and social security funds. It grows when spending exceeds revenue.
Fiscal balance: Public revenue minus public spending in a year. A negative number means more money goes out than comes in (a deficit), and the gap is borrowed. A positive number is a surplus.
Deficit and surplus: Deficit: spending is larger than revenue, and the gap is borrowed. Surplus: revenue is larger than spending.
Interest costs: The interest the public sector pays on its debt. The more debt and the higher the rate, the more money goes to interest instead of services.
Current path: What would happen if nothing new is decided: the government's existing decisions go ahead and the population ages as forecast. The yardstick for your own changes.
Your changes: The same calculation as the current path, but with the changes you made on the sliders and the effects that follow from them.
Actual: The real figures for past years, from Statistics Finland. The latest year is preliminary and may still be revised.
Ministry of Finance forecast: The Ministry of Finance's official forecast of the economy and public finances up to 2030. This calculation follows it until then.
Model assumptions: After 2030 there is no official forecast, so the calculation continues with this model's assumptions (e.g. growth, interest rates, wages). You can change them. The further ahead, the less certain the result.
Uncertainty: The shaded area shows how much the result could vary. The calculation was run 300 times with slightly different assumptions: the result lands in the light area 8 times out of 10 and in the dark area half the time.
Public sector: Central government, municipalities, wellbeing services counties and social security funds (e.g. earnings-related pension funds and Kela's funds) together. In statistics it is called general government.
Private sector: Businesses and households – everything that isn't the public sector. Most tax revenue comes from private-sector wages, consumption and profits, so its growth matters a lot.
Employment pension schemes: Pension companies and funds that collect earnings-related pension contributions into funds for future pensions. They run a surplus, but that money can't pay for other spending – which is why the balance is also shown without them.
Wellbeing services counties: The 21 counties and Helsinki that have run health, social and rescue services since 2023. Central government funds most of their spending.
Government decisions: Savings, spending increases and tax changes the government has already decided. They are part of the current path. With the slider you can try what would happen if they were carried out only partly, or reversed.
Spending by area: What public money is spent on: health, education, pensions, defence and so on. The split is the official classification of spending by function in statistics (COFOG).
Slider (lever): A choice you can change: for example how much is spent on health care or how high VAT is. A change is a percentage of what the current path would be.
Start year and phase-in: The year your changes start to apply, and over how many years they reach their full size. In reality decisions usually take effect the next year at the earliest.
Direct (static) effect: A change's effect calculated directly, assuming nobody changes their behaviour. E.g. a 1% rise in a tax that raises €30bn brings €0.3bn. Real effects can be bigger or smaller.
Cause-and-effect effect: An indirect consequence a change can cause. E.g. cutting health care makes queues longer, and part of the saving comes back later as costlier treatment. These are assumptions you can adjust or switch off.
Confidence: How well an assumption or effect is researched. High: based on law or official statistics. Medium: an official forecast or established practice. Low: a reasoned estimate. Speculative: uncertain, off by default.
Disputed: Economists disagree whether this works this way, and how strongly. Disputed effects are off by default.
Growth effects: Changes in spending and taxes can change the growth of the whole economy: cuts and tax rises reduce purchasing power and slow growth for a while, stimulus speeds it up. The size is disputed, so this is off by default.
Supply-side effects: The long-run effect on how much work and investment happens in Finland: e.g. lower taxes on work can mean more work, and lower company taxes more investment. A bigger economy brings more tax revenue. The size is disputed, so this is off by default.
Calibration: An adjustment line that makes the calculation match the Ministry of Finance forecast up to 2030. It shows how much the model's own rules differ from the official forecast.
€bn: A billion euros, i.e. a thousand million euros. E.g. €1bn is about €180 for every person in Finland.

Feedback

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Email: petri.kivi@hotmail.com