Danske Bank and Standard & Poor’s both expect economic growth to slow down in Finland in 2018.
Statistics Finland on Friday published preliminary data indicating that the country’s gross domestic product grew by 2.7 per cent year-on-year in 2017, driven particularly by increases in exports and investment activity. In January, however, the working-day adjusted output only crept up by 0.9 per cent from the previous year.
“It is astonishing how rapid the slowdown in total output was in January,” commented Pasi Kuoppamäki, the chief economist at Danske Bank.
“Industrial and retail statistics gave us a reason to expect something clearly better. The numbers can of course be specified later, but Finland’s economic growth seems to be slowing down.”
Standard & Poor’s on Saturday forecast that the economy will expand by 2.5 per cent in 2018 and by 1.6 per cent in 2019, viewing that structural challenges will remain the primary obstacles to economic growth in Finland.
“Flexibility and mobility issues in the labour market have led to relatively high long-term unemployment. Despite Finland’s strong cyclical growth in 2017, unemployment remained at 8.6 per cent in 2017, one percentage point higher than the EU average of 7.6 per cent,” the credit rating agency said.
It also cast doubt over the attainability of the employment rate target of 72 per cent by predicting that the preparedness to carry out the necessary reforms is likely to wane as political parties start posturing for the upcoming elections.
“In light of Finland’s demographic profile, achieving this goal would be important to maintaining growth prospects,” it added.
Finnish economists have contrastively estimated that the government is poised to meet its employment rate target by the end of the current electoral term in 2019.
Aleksi Teivainen – HT
Photo: Markku Ulander – Lehtikuva
Source: Uusi Suomi