August 14, 2019 / 2:11 PM / 2 months ago

UPDATE 1-Finland's finance ministry proposes 2020 budget deficit of 2.3 bln euros

(Adds detail, background)

HELSINKI, Aug 14 (Reuters) - Finland’s finance ministry proposed a 2020 budget of 57 billion euros ($63.7 billion) on Wednesday, up from an estimated 55.7 billion in 2019, and a deficit of 2.3 billion euros, up from a deficit target of 1.7 billion for 2019.

Finland’s centre-left government, which took office in June, has said it would step up spending to boost the economy, changing course in comparison with the previous centre-right government which managed to curb spending slightly.

The budget “is front-heavy in the sense that we boost the economy in the beginning but our deadline is 2023,” finance minister Mika Lintila told a news conference, referring to the government’s intention to balance the budget by the end of its four-year term, by increasing employment.

Euro zone member Finland’s economy has been growing in the past years after nearly a decade of stagnation between 2007 and 2015, caused, among other things, by a decline in Nokia’s once market-leading phone business and a recession in neighbouring Russia.

The ministry in June forecast Finland’s gross domestic product to grow 1.6 percent this year and 1.2 percent in 2020. ($1 = 0.8952 euros) (Reporting by Anne Kauranen Editing by Peter Graff)

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