Nordic Economies Economic Forecast

Economic Snapshot for the Nordic Economies

April 1, 2020

The regional economy is expected to contract this year for the first time since the global financial crisis a decade ago, hammered by the fallout from the coronavirus pandemic. Moreover, oil-producing Norway will suffer from lower energy prices . However, fiscal and monetary policy stimulus should soften the blow.

Nordic Economies Financial & Monetary Sector News

Regional inflation slowed for the second consecutive month in February, falling to 0.9% from 1.2% in January, mainly due to significantly weaker price pressures in Norway and Sweden. This year, average inflation is expected to moderate compared to last year, as demand weakens and energy prices fall. An upside risk in the short-term, however, is supply-side disruption.

The central banks of Iceland  and Norway  slashed key policy interest rates in recent weeks in response to growing economic headwinds, Sweden’s Riksbank  cut the rate it charges banks for overnight loans for similar reasons, while Denmark’s Central Bank raised interest rates to defend the Danish krone. Regional monetary policy is seen looser  this year than last year.

The currencies of Iceland and Norway have taken a beating in recent weeks, as the fallout from the coronavirus rocked their economies, while the currencies of Denmark and Sweden have also weakened, albeit less significantly.  Looking ahead, regional currencies are expected to depreciate at the end of this year compared to the end of last year against the U.S. dollar .



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Nordic Economies Economic News

  • Finland: Economic activity drops at sharpest rate in over seven years in March

    May 15, 2020

    Economic activity fell 2.7% year-on-year in working-day adjusted terms in March, contrasting February’s revised 1.2% increase (previously reported: +1.0% year-on-year) and marking the sharpest fall since March 2013. The broad-based decline was driven by shrinking output in both the secondary—which includes manufacturing and construction—and services sectors.

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  • Finland: Consumer prices record biggest fall since November 2015 in April

    May 14, 2020

    Consumer prices fell 0.3% in April over the last month, coming in below the 0.2% fall logged in March.

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  • Sweden: Consumer prices decrease in annual terms in April

    May 13, 2020

    Consumer prices with a fixed interest rate (CPIF)—which is closely followed by the Central Bank—decreased 0.3% in April compared to the previous month, down from the 0.2% decrease in March and largely due to lower fuel prices. CPIF prices dropped 0.4% in April compared to the same month a year earlier, contrasting the 0.6% increase in March and tumbling below the Central Bank’s tolerance band of 1.0%–3.0% increases.

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  • Finland: Current account drops deeper into deficit in March

    May 13, 2020

    The current account deficit grew to EUR 1.2 billion in March, from the EUR 0.5 billion shortfall recorded in both February 2020 (previously reported: EUR -0.4 billion) and March 2019. In the 12 months leading up to March, the current account balance logged a shortfall of EUR 3.3 billion, dropping from February’s EUR 2.6 billion deficit. The merchandise trade balance, however, came in at a EUR 0.2 billion surplus in March having recorded a EUR 0.4 billion deficit in February (March 2019: EUR 0.3 billion).

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  • Norway: Inflation ticks up in April

    May 11, 2020

    Consumer prices increased 0.45% in April, following March’s flat reading.

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