Finland Economic Forecast

Finland Economic Outlook

December 23, 2021

A second national accounts release confirmed that the economy lost steam in Q3. The slowdown came on the back of more moderate private consumption growth and fixed investment swinging back into contraction. In contrast, the external sector contributed to overall growth. The recovery will have likely lost further traction in the final months of the year: In October, economic activity and retail sales contracted from the prior month, while industrial output slowed further. More positively, the unemployment rate dropped to a 19-month low in October, although higher price pressures likely dragged on spending. Meanwhile, the government has recently tightened entry restrictions, despite hitting its intended 80% vaccination rate, in a bid to tame Omicron’s spread. Regardless, economic sentiment hit all-time highs both in October and November, boding well for activity.

Finland Economic Growth

The economy is seen expanding at a softer pace in 2022, following this year’s projected return to growth. Stronger private and capital spending, as well as higher export growth, will sustain activity. That said, the gradually aging population could lead to increased fiscal pressures going forward, posing a downside risk to the outlook. FocusEconomics panelists project GDP to grow 2.8% in 2022, which is unchanged from last month’s forecast, and 1.6% in 2023.

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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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