Finland | Economy remains resilient with growth seen, but downside risks are rising
Finland’s GDP in the last few quarters has been revised up slightly, lifting our growth forecast for 2021. High-frequency indicators show that the economy remains resilient amid mounting downside risks related to supply-chain bottlenecks and surging energy prices.
What you will learn:
- Q2 GDP grew by 2.2% q/q according to the latest estimate, while previous quarters were also revised up.
- Fixed investment was up by 1.2% in Q2, driven by private sector investment, resulting in an upward revision for this and next year.
- Inflation ticked up to 2.5% in September, below many European peers.
Finland’s growth forecast cut amid weak confidence and soaring inflation
We have lowered our 2022 GDP growth forecast for Finland to 1.5% from 1.7% last month, as weakening confidence further dampens the outlook. We expect inflation to peak higher with a greater passthrough to core prices, squeezing real incomes and denting consumption. Russia has accounted for almost 10% of Finland's goods trade, among the highest in Europe.Find Out More
Why we see eurozone inflation slowing sharply next year
We have revised our 2022 eurozone inflation forecasts sharply higher, to 6.0%, since the start of the Ukraine war, as energy and food prices began to soar and new supply bottlenecks emerged. That said, we still see inflation decelerating sharply to 1.3% in 2023, putting us below consensus. While we recognise significant risks to our views, inflation should slow to below 2% in H2 2023.Find Out More