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.

What you will learn:

• We expect the economy to struggle before rebounding in H2, with 1.8% expansion in 2023.
• inland had a weak start to 2022 – the economy contracted in January amid concerns about the Omicron Covid variant.
• However, growth turned positive in February and March despite the outbreak of Russia-Ukraine war, resulting in 0.4% growth in Q1 based on a flash estimate.