The sustainability gap is the difference between income received and outgoings committed to as a result of demographic change and an ageing population.
But now Finland’s senior citizens are healthier and more active than ever before. The Institute for Health and Welfare’s director Pekka Puska has called this development surprising, and it is likely to have a positive impact on public finances.
As outgoings on pensions and healthcare rise, income from taxes drops, causing a hole in state budgets as baby boomers retire. Estimates of how large that hole varies, and Etla is at the more optimistic end of the spectrum.
At worst, the Institute believes the gap is 2.5 percent of GDP -- that's a percentage point lower than the Finance ministry’s estimate of 3.5 percent, 1.5 points below the Bank of Finland’s forecast, and less than half of the 5.8 percent the EU commission is predicting.
Etla managing director Vesa Vihriälä says that in general, Finns need expensive care only in the final two years of their lives.
”We believe that the strain on healthcare will not be as bad as many others assume,” said Vihriälä. ”We can start from the assumption that people don’t need care for long periods. Despite that it should be remembered that the sustainability gap has not been eradicated even in our estimate. It exists and there are big risks attached to it.”