Finland Economic Forecast

Finland Economic Outlook

May 31, 2022

After slowing in Q4, the economy lost further steam in Q1. Preliminary data shows that seasonally-adjusted growth in Q1 was milder compared to Q4 due to the Omicron variant and rising inflation hampering consumer spending and industrial output. Still, activity picked up in March amid looser pandemic restrictions and a healthy labor market. In Q2, the economy should be slowing further: Consumer confidence remained pessimistic amid the war in Ukraine and the highest inflation in more than 30 years. That said, the lowest unemployment since June 2019 in April is likely supporting spending. In politics, on 18 May Finland applied to join NATO. Within the same week, Russia halted gas deliveries to Finland. This has already prompted the latter to diversify its energy supply, with higher domestic electricity output, the adoption of alternative fuels and gas and oil imports from Norway and Estonia.

Finland Economic Growth

Growth this year should halve from 2021’s level due to inflation eroding private spending and the war in Ukraine hindering trade. Lingering supply shocks and energy disruptions will further weigh on industrial activity. Still, a tight labor market and elevated household savings will buffer growth from some of the downside shocks. FocusEconomics panelists project GDP to grow 1.8% in 2022, which is down 0.2 percentage points from last month’s forecast, and 1.5% in 2023.

Finland Economy Data

2015 2016 2017 2018 2019
Population (million)5.55.55.55.55.5
GDP per capita (EUR)38,63039,64241,03942,37643,508
GDP (EUR bn)211218226234240
Economic Growth (GDP, annual variation in %)0.52.73.11.70.9
Domestic Demand (annual variation in %)1.33.41.52.9-0.3
Consumption (annual variation in %)1.62.41.01.81.0
Investment (annual variation in %)0.58.64.23.9-0.6
Exports (G&S, annual variation in %)0.43.98.91.77.2
Imports (G&S, annual variation in %)2.15.84.15.52.3
Industrial Production (annual variation in %)-0.94.23.43.41.8
Retail Sales (annual variation in %)0.52.02.61.82.3
Unemployment Rate9.38.98.67.46.7
Fiscal Balance (% of GDP)-2.4-1.7-0.7-0.9-1.1
Public Debt (% of GDP)63.663.261.359.659.4
Inflation Rate (CPI, annual variation in %)-0.20.40.81.11.0
Inflation Rate (HICP, annual variation in %)-0.20.40.81.21.1
Inflation (PPI, annual variation in %)-2.0-2.43.44.60.4
Policy Interest Rate (%)0.050.00.00.00.0
Stock Market (annual variation in %)12.49.66.5-5.914.6
Exchange Rate (vs USD)1.091.051.201.141.12
Exchange Rate (vs USD, aop)1.111.111.131.181.12
Current Account (% of GDP)-0.9-2.0-0.8-1.6-0.8
Current Account Balance (EUR bn)-2.0-4.4-1.7-3.8-1.8
Trade Balance (EUR billion)1.90.01.50.22.5
International Reserves (EUR)9.29.98.89.010.2
External Debt (% of GDP)-  -  -  -  -  

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Finland Facts

Value Change Date
Bond Yield0.033.70 %Dec 30
Exchange Rate8.78-0.38 %Jan 01

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