The logo of OP Financial Group in Helsinki on 8 February 2023. Economists at the Finnish financial services provider have upgraded their growth forecast for the national economy in 2025, pointing to the diminishing likelihood that the country will experience a severe recession in 2024. (Antti Hämäläinen – Lehtikuva)

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ECONOMISTS at OP Financial Group are slightly more optimistic about the economic prospects of Finland in 2024.

Reijo Heiskanen, the chief economist at OP, on Tuesday stated in a press release that the country will likely only experience a mild recession, with the national economy forecast to tread water in 2024. Although there are no signs of an immediate recovery, he argued that the country should be pleased if it only experiences a mild recession given the number of risk factors that have marred its economic outlook.

“The Finnish economy is hardly on firm ground yet, but the preconditions for a turn for the better are emerging,” he analysed.

The Finnish financial services provider has duly upgrade its growth forecast for next year from 1.2 to 1.4 per cent.

OP Financial Group also estimated that slowing inflation and declining interest rates will also prop up the global economy at the end of the year.

Wages in the eurozone, however, have risen so rapidly that they threaten the two-per-cent inflation target of the European Central Bank (ECB). Central banks consequently have no grounds for slashing interest rates rapidly.

“Rapid interest rate cuts by central banks are prevented by the excessive growth of wages. Monetary policy is still relatively tight, which inhibits economic growth and wage pressures. Central banks will lower their interest rates sooner or later during the course of this year,” predicted Tomi Kortela, an economist at OP.

Aleksi Teivainen – HT

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