Nordea: Finland risks ‘protracted recession’
The banking concern Nordea’s latest economic outlook paints a bleak picture of Finland’s prospects.
While the other Nordic countries are emerging from recession, Finland faces continued negative growth as the stuttering Russian economy slows cross-border trade.
Nordea’s latest economic outlook forecasts a third consecutive year of negative or stagnant growth for Finland. The bank says Finland is buffeted by problems in the Russian economy, which affect retail spending and exports in Finland.
Finland is not doing as well as Sweden, Norway and Denmark, all of which the bank expects to show growth of between one and three percent in 2014.
“Finland is hit by a renewed risk of ending up in a protracted economic recession,” said the bank in its Nordic economic outlook.
The bank’s economists say that by the end of this year Finland’s economy will have either contracted or shown zero growth for ten quarters in a row. Nordea says that Finland’s cherished AAA credit rating could be under threat because of the stuttering economy.
“One credit rating agency has already put Finland on negative watch,” said Aki Kangasharju, Nordea’s chief economist. “The same kind of move can be expected within the year from the other agencies.”
The bank has specific policy recommendations, urging Finland to bring in structural reforms and cut public spending.
Related stories from around the Arctic:
Canada: Nunavut should turn growth into prosperity according to economic outlook, CBC News
Finland: Russia-Ukraine tensions may impact Finnish economy, Yle News
Greenland: Analysis: Implications of Greenland’s decision to allow uranium mining, Blog by Mia Bennett
Norway: Norway’s Prime Minister calls for advancing Northern Norway’s knowledge economy, Blog by Mia Bennett
Russia: Visa-free Russian border ‘would create thousands of jobs’ in Finland, Yle News
Sweden: Mine applications hit new low in 2013, Radio Sweden
