One of Finland’s biggest banks, Aktia, has raised its estimate of the nation’s GDP for this year to 3.1 percent. However it predicts that pace to slow to 2.6 percent next year and 2.2 percent in 2019.
“Everything points toward 2017 becoming an economically good year in historic terms,” Aktia’s chief economist Heidi Schauman said on Monday.
She notes that the bank upgraded its forecast for next year, as it expects positive developments to consumption, investments and foreign trade to continue.
Aktia expects the employment rate to improve further, but not sufficiently in the bank’s view, which it says dampens the consumption outlook. The number of people with jobs is not rising hand-in-hand with the employment rate, it notes, as the working-age population is shrinking.
Schauman says it is important to keep in mind the realities associated with the ageing of the population and their impact on growth potential and the public-sector economy, referred to as a sustainability gap.
Last week, Statistics Finland said that the jobless rate dropped in October to 7.3 percent, compared with 8.1 percent a year earlier and eight percent in September. The employment rate meanwhile stood at 70 percent.
On the global level, Aktia Bank foresees growth continuing at an annual rate of around 3.6 percent over the next two years, adding the caveat that such prognoses include much uncertainty.
“After six years of interest rates remaining at unusually low levels without a rise even in short-term rates, there are for the first time visible signs of rate increases during the prognosis period. We expect the first rate hike in mid-2019,” Schauman says.
Related stories from around the North:
Canada: Canada announces $175 million investment in Arctic waters protection, Eye on the Arctic
China: China’s Belt and Road initiative moves into Arctic, blog by Mia Bennett
Finland: Positive forecasts upgraded to 3% growth for 2017 Finland economy, Yle News
Norway: Tourism on the rise in waters around Svalbard, Norway, The Independent Barents Observer
Russia: Northern Sea Route is free of ice, Arctic shipping thrives, The Independent Barents Observer
South Korea: South Korean company plans shipping through Arctic Russia, The Independent Barents Observer
Sweden: Swedish PM questions Chinese warships in Baltic Sea, Radio Sweden
United States: Alaska’s cruise industry just keeps getting bigger, Alaska Dispatch News