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An aerial view of the Vuosaari Harbour in Helsinki, Finland, on 31 January, 2018.
An aerial view of the Vuosaari Harbour in Helsinki, Finland, on 31 January, 2018.

 

Finland has only a few years left to enjoy the current economic upswing, predicts Jan von Gerich, the chief strategist at Nordea.

“The global economy is in good form, but the upswing will not continue indefinitely. Based on market signals, the United States will slip into a recession in mid-2020; Finland will follow suit at the end of that year,” he wrote in his blog on Thursday.

The United States, he pointed out, will have enjoyed the longest economic upswing in its history this summer, and its economy is likely to gain further momentum during the course of this year. The American labour market, however, is close to full employment, while inflation is on the rise and the central bank is shifting towards tighter monetary policy.

“Continuing the upswing will be increasingly challenging in the years to come,” summarised von Gerich.

He added that the downturn will ultimately reach the eurozone due to the high degree of integration of the financial markets between the monetary union and the United States. Historically, the eurozone has slipped into a recession roughly a year after the United States, according to von Gerich.

Finland as a small economy is innately more vulnerable to fluctuations in the global economic situation than the average eurozone country, he said.

“The recession will probably reach Finland at the end of 2020, roughly at the same time as Germany. Finland thereby has less than three years of upswing left,” said von Gerich.

Statistics Finland reported last week that the country’s gross domestic product grew by 0.7 per cent from the previous quarter between October and December, 2017. The gross domestic product, therefore, grew in every quarter of last year at a rate that amounted to annual growth of 3.0 per cent.

The output adjusted for working days, meanwhile, grew by 2.7 per cent year-on-year between October and December, 2017.

Aleksi Teivainen – HT
Photo: Jussi Nukari – Lehtikuva
Source: Uusi Suomi

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