Economists more optimistic on economic prospects than population at large
Political divisions reflected in economic forecasts
Half of Finns feel that the Finnish economy is certain not to go into recession within the year, while 45 per cent are more pessimistic, according to a poll commissioned by Helsingin Sanomat and conducted by Suomen Gallup.
Members of the postwar baby boom generation, currently aged 50 to 64, are more worried of a decline than others, as are those with lower incomes and less education. The unemployed, and those living in households with many children also tend to be more pessimistic.
Supporters of the National Coalition Party are generally more optimistic in their economic outlook, while supporters of the opposition Social Democratic Party are the most sceptical.
The same question was put to a number of professional economists. All except Aki Kangasharju of the Government Institute for Economic Research (VATT) felt that a recession is unlikely.
Bankers came close to being certain that there would be no decline.
Department head Antti Suvanto, Bank of Finland:
"Slower growth is likely but this does not mean a recession in the sens of a decline lasting six months."
Research professor Aki Kangasharju, Government Institute for Economic Research (VATT):
"The economy is certainly cooling down, so in that sense it is easy to tilt in that direction, but it naturally depends on how a recession is defined. The turnaround in the rise in housing prices is one indication of a cool-down. It is likely that a slump will come, but I am not absolutely certain of it."
Economist Helena Pentti, Central Organisation of Finnish Trade Unions (SAK):
"Naturally, it is not possible to say anything definite, but it [a recession] seems rather impossible."
Economist Penna Urrila, Confederation of Finnish Industry (EK):
"If a recession is defined as a significant slowdown in growth, or actual movement backward, I would see it as being relatively unlikely. In the United States it might be quite likely."
"I consider the situation in the USA to be worse than during the bursting of the IT bubble in 2000, but that did not even cause a recession here. Europe could be in a better situation, and the growing role of Asia could also help balance things."
Head economist Leena Märttinen, Nordea Bank:
"There is uncertainty on the markets and elsewhere, which easily means that people will lunge to the negative side for fear that the sky might be falling. Undoubtedly the financial market is such an unpredictable beast that when there are no models to grab hold of it, it is easy to fear the worst."
"Our forecast remains that the USA will close on the plus side in GDP growth in 2008, which is very good news for the euro zone and for Finland. In our basic forecast we say that there is a likelihood of more than 40 per cent that there will be a recession in the USA, but that also means that there is a likelihood of over 50 per cent that this will not happen."
Head economist Lauri Uotila, Sampo Bank:
"When wages rise, interest rates fall, and employment does not significantly weaken, these factors certainly maintain the domestic market. There can be some setbacks on the export market in horror scenarios, but that is not much of a problem, as there has long been a significant surplus in foreign trade as well.
"If war breaks out in the Persian Gulf and if the price of oil reaches 150 dollars, it would have an impact on Finland through various chains of events. But if nothing that severe happens in the world, Finland will not go into recession, although this year will be a year of slightly slower growth than in the two preceding years."
Head economist Timo Lindholm, OKO Bank:
"Although the international side might weaken, Finland's domestic market is stronger on both the consumer level, and the corporate level than in the previous cycle of 2001-2003. The domestic market is holding up the economy well enough to keep the overall situation from diving too deep, even if exporters might stumble a bit."
Helsingin Sanomat
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| 20.2.2008 - TODAY |
 Economists more optimistic on economic prospects than population at large |
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