The Finnish economy has returned to a growth path supported by private consumption and investment, states the Bank of Finland.
The Bank of Finland has upgraded its growth forecast for both next year and the following year, predicting that the gross domestic product will increase by 1.3 per cent year-on-year in 2017 and by 1.2 per cent year-on-year in 2018.
“The growth, however, will remain sluggish in comparison to previous upturns and the rest of the euro area, with structural economic problems and population ageing slowing down the recovery,” it says in a press release.
Private consumption is expected to remain the primary driver of economic growth, as the improving employment situation and low inflation rates continue to increase the amount of disposable household income. Private consumption is forecast to increase by 1.4 per cent in 2017 and by approximately 1.0 per cent per annum in the following years.
Finnish exports, meanwhile, are expected to increase by 2.1 per cent year-on-year in 2017 and by 2.5 per cent year-on-year in 2018 as a result of growing external demand and the improved competitiveness of Finland. The trade balance will nevertheless continue to show a deficit due to deteriorating terms of trade and rising domestic demand, according to the forecast.
The Bank of Finland has also reiterated its demands for structural reforms.
“If an economy is able to reform in a way that creates jobs and improves productivity, it will improve the outlook for economic growth and the public economy,” Erkki Liikanen, the Governor of the Bank of Finland, said according to Kauppalehti. “This will also reduce the risk of growing marginalisation and lack of prospects,” he added.
Aleksi Teivainen – HT
Photo: Markku Ulander – Lehtikuva
Source: Uusi Suomi