In 2015, Finnish economy expanded 0.5%, according to preliminary estimate, after shrinking for three continuous years. Still the level of Finland’s GDP is around 5% below before the 2008 recession level. In the European Union, Finland was the worst performer after Greece. However, the economy has stopped shrinking, while other economic indicators including consumption and unemployment have performed better. In 2015, private consumption rose surprisingly by 1.4%. Meanwhile, labor market has stabilized for at least a brief period of time, and the unemployment trend has stropped increasing.
The Finnish economic growth outlook continues to be weak and is below its potential growth. According to Danske Bank, the recent data does not imply that the situation will rebound rapidly. In January, new manufacturing orders, industrial output and exports declined despite the country’s main trading partners expanding modestly.
Danske Bank added that the Finnish GDP in 2016 is expected to be slightly higher mainly because of moderate increase from exports and due to construction. Also, growth in private consumption is likely to decelerate, while fiscal austerity is expected to keep a lid on public spending.
“We expect Finnish GDP to grow by 0.7% in 2016 and 1.1% in 2017”, says Danske Bank.
