Finland Economic Forecast

Finland Economic Outlook

October 27, 2020

The economy is expected to have emerged from recession in Q3 after contracting in Q2 due to the fallout from the pandemic; however, data points to a fragile recovery. Economic activity swung to expansion in July–August from Q2’s overall contraction, although growth lost steam relative to its peak in June. Meanwhile, the unemployment rate rose to a near three-year high in September and consumer confidence decreased in the same month to its lowest value since May, likely capping private spending. On the external front, merchandise exports continued to fall in July–August, albeit at a softer pace compared to Q2. On the political front, on 15 October the government presented the 2021 draft budget, projecting public debt to rise but the fiscal deficit to narrow compared to 2020. The budget will focus on improving employment conditions, particularly for young people and over-55s, and environmental issues.

Finland Economic Growth

The economy is set to grow strongly next year, recovering from this year’s Covid-19-induced GDP contraction. A recovery is expected on the back of the reopening of economies as international travel and foreign trade resume, buttressing both domestic and external demand. However, uncertainty lingers over further waves of the virus, clouding the outlook. FocusEconomics panelists project GDP to grow 3.1% in 2021, which is up 0.1 percentage points from last month’s projection, and 2.1% in 2022.

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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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