Nordea Lowers Forecast for Finland’s Economic Growth Amidst Government Adjustment Measures

According to Nordea, additional adjustment measures are necessary to address the trend of increased public finances indebtedness. The bank has lowered its forecast for Finland’s economic growth next year due to the government’s implementation of these measures. Nordea predicts that Finland’s GDP will grow by 1.5 percent next year, down from their earlier estimate of two percent.

Despite economic challenges, the bank anticipates a turnaround in the economy with factors like inflation slowdown, improved household purchasing power, and central bank interest rate cuts boosting economic growth. Last year, Finland experienced one of the weakest economic developments in Europe, with rising mortgage rates affecting household purchasing power and freezing housing construction.

Nordea expects that private consumption will grow this year as inflation slows and improve retail trade and services. They predict that a drop in interest rates will partially offset the effects of adjustment measures on domestic consumption, ultimately leading to a reversal in the growth of the debt ratio next year. The export industry will benefit from increased global economic growth and improved consumer confidence.

In conclusion, Nordea’s assessment suggests that while additional adjustment measures are essential to address public finances’ indebtedness, they may impact economic growth in the short term. However, with factors like inflation slowdown and improved household purchasing power, Finland’s economy is anticipated to return to growth this year despite temporary slowdown caused by government’s adjustment measures.