Growth outlook for Finland is weak despite impressive Q1

We have increased our 2022 GDP growth forecast for Finland to 1.8% from 1.5% last month, due to a stronger-than-expected Q1. However, downside risks to activity dominate, with high inflation increasingly passing through to core prices, squeezing real incomes and denting consumption.

What you will learn:

• Meanwhile, Finland’s traditionally large trade exposure to Russia presents a weakness. We expect the next few quarters to be challenging, with 1.6% expansion in 2023.
• Finland had a weak start to 2022 – the economy contracted in January amid the Omicron Covid variant.
• Inflation hit 7.0% in May, the highest in 30 years.