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Monday, December 04 2023

Finland’s central bank lowers 2022 growth prediction

Consumer confidence in Finland drops to historic low
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Helsinki: The Bank of Finland (BOF) has slightly lowered its growth prognosis for Finland next year to 2.6 per cent.

The central bank noted the economy is continuing to recover from the steep downturn caused by the Covid-19 pandemic, reports Xinhua news agency.

However, the recovery is slowed by a worsening of the virus situation, shortfalls in raw materials and electronics components, and an increase in the general level of prices.

In September, BOF predicted the country’s growth in 2022 to be 2.8 per cent.

According to the bank, if the pandemic situation improves in the near future, the outlook could be better.

Households could begin spending the savings accrued during the pandemic, and investments by companies could grow faster than predicted.

By 2024, the economic growth rate will slow down to 1.3 per cent as the growth possibilities in Finland will be affected by the aging population structure and the slow pace of labour productivity growth.

The Covid-19 crisis has given rise to an expanded level of debt in Finland’s public finances.

The recovery in the economy will help to remedy the deficit.

However, the public finances will nevertheless still be in deficit at the end of the forecast period, the bank said.

Finnish inflation will remain at 2.1 per cent this year, and 2.0 in 2022, and slow down to 1.6 per cent in 2023.

The bank predicted that energy prices will begin to decline and the supply bottlenecks to ease next year.

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