THE GROWTH RATE of the Finnish economy will slow down from 2.2 per cent in 2018 to 1.6 per cent in 2019 and 1.4 per cent in 2020, indicates the latest economic forecast of the S-Bank.
“The economic growth is being sustained by household consumption. Wage increases and employment growth are supporting the purchasing power of households and household consumption, whereas investments and exports are growing sluggishly,” said Timo Hirvonen, the chief economist at what is the first so-called supermarket bank in Finland.
Hirvonen on Tuesday drew attention to the results of the latest consumer barometer, which indicate that households are increasingly interested in saving rather than spending all their earnings. The S-Bank, as a result, expects the currently negative savings rate to improve gradually over this and next year.
“Residents of the capital region, in particular, consider this an opportune time for saving money. What is somewhat surprising is that the eagerness to save has taken a big leap forward also in Northern Finland,” said Hirvonen.
“It seems right now that the most eager savers in Finland are found inside Ring Road III, as well as in the Oulu region and Lapland,” he added.
The S-Bank also revealed that it expects investment activity to slow down marginally and renovation investments to become increasingly important in the construction industry. Employment growth is similarly set to slow down from the previous year, with around 30,000 people expected to join the ranks of the employed in 2019.
Hirvonen said Finnish mortgage borrowers will be able to enjoy low interest rates also in the near future. The European Central Bank, he estimated, is likely to postpone its interest rate hike until 2020.
“Finns have been able to enjoy the lowest interest rates on housing loans in the euro area over the past decade. This is not about to change rapidly,” he assured.
Aleksi Teivainen – HT
Source: Uusi Suomi