(Bloomberg) -- Finland’s government hammered out a budget for 2024 more in deficit than previously projected and contrasting with its election pledges of fixing the Nordic country’s finances.
The pro-business coalition that won April’s general election with a promise to be responsible with money put together its first spending plan with a shortfall of €11.5 billion ($12.3 billion). That’s more than the €10.1 billion proposed by the Finance Ministry in its August draft budget that formed the starting point for Tuesday’s talks.
Read More: Finland’s First Attempt to Slash Budget Deficit Comes Up Short
“Our economy is in a serious situation,” Prime Minister Petteri Orpo told reporters. That creates challenges for “the funding of our welfare society and its key services,” he said.
A large part of the increase in total spending to €87.9 billion from last year’s €83.2 billion is explained by higher costs from primary health care after the previous cabinet’s overhaul of how it’s organized, according to a statement late on Tuesday.
Orpo is putting much of his faith on the capacity of planned structural reforms to boost employment and growth, and thereby help public finances in the coming years.
His pro-business party won the election that centered on the plight of public finances. The growth in the country’s debt load beyond 70% of gross domestic product — a burden similar to Germany’s — is a key topic of concern for Finns. Many still remember Finland’s 1990s depression, one of its worst-ever economic crises, which caused mass unemployment and bankruptcies.
Read More: Debt Anxiety Is Inflaming Finland’s Close-Run Election Battle
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