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Finland’s economy stable despite pandemic: Fin Min - 2 min read

Helsinki: The deterioration of the Covid-19 situation is bound to slow down Finland’s economic recovery only momentarily, the country’s Ministry of Finance said

In its Economic Survey published here on Monday, the Ministry however also noted that uncertainties still abound about the evolution of the pandemic, the emergence of new virus variants and the efficiency of the vaccination campaigns, reports Xinhua news agency.

Finland’s economy is expected to grow rapidly in 2021 and 2022, the Ministry said, although not quite as fast as it was projected at the beginning of 2021.

Finland’s gross domestic product (GDP) is expected to grow by 3.4 per cent in 2021, 3.0 per cent in 2022, 1.5 per cent in 2023 and 1.4 percent in 2024.

Economic recovery will continue, and growth will accelerate in 2022, particularly in those sectors where output has not yet reached pre-pandemic levels, for example accommodation and catering.

In September, the Ministry predicted 3.3 per cent GDP growth for this year, 2.9 per cent for 2022 and 1.4 per cent for 2023.

On December 17, the Bank of Finland predicted 2.6 per cent GDP growth for 2022 and 3.5 per cent for 2021.

At a press conference on Monday, Mikko Spolander, director general of the Finance Ministry’s Economics Department, said that while the pandemic would recede in time, navigating the economic and demographic transformation successfully would require competitiveness, technological solutions, substantial private investment and prudent public spending.

The high savings rate and consumer confidence have created the conditions for rapid growth in private consumption. Private consumption and private investment will continue to grow in 2022, he said.

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Funding received from the EU’s Recovery and Resilience Facility (RRF) will boost private investment, and research and development investment in particular is expected to benefit.

The investment outlook for Finland’s industry is also good, he said. In 2022, exports will continue to increase markedly due to growth in the global economy.

The imbalance between general government expenditure and revenues will decline sharply in 2021 but will still be well above the pre-pandemic level.

According to the ministry, the general government deficit will not be eliminated completely and will remain around one percent of GDP until the mid-2020s.

The most significant risks to the forecast continue to be related to the Covid-19 pandemic and the development of the restrictive measures taken to manage it.

Virus variants are changing the outlook for disease control, and the pandemic situation may deteriorate rapidly despite the progress of vaccinations, said the Ministry.

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