Nordea forecasts continued slump for Finnish economy

Yle News
Posted: Thursday, December 10, 2015 at 21:14 — Last Updated: Tuesday, January 5, 2016 at 16:37
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Nordea is forecasting that the Finnish economy will grow by just 0.5 percent next year—and only 0.7 percent in 2017. (Olivier Morin/AFP/Getty Images)

Nordea’s fresh economic forecast warn of continued slow growth in the Finnish economy—in stark contrast to much of the rest of the western world.

Nordea is forecasting that the Finnish economy will grow by just 0.5 percent next year—and only 0.7 percent in 2017. The bank says that Finland’s growth curve is different to that seen in many other western economies.

The company’s analysts also say that the collapse of the so-called ‘social contract’ to reduce labour costs might have a negative effect on growth if it brings with it a wave of strikes as industrial relations deteriorate.

“Imports won’t grow because of our competitiveness problem and structural issues in export industries,” said Nordea economist Pasi Sorjunen. “Consumption will also remain weak.”

Comparison with other western economies

The bank’s economists suggest that Finland’s divergence from the rest of the west will continue unless the country can implement structural reforms that the bank claims will promote growth.

The Bank of Finland’s last forecast, published in June, puts Finland’s economic growth at 1.2 percent in 2016 and 1.3 percent in 2017.