Finland’s Ministry of Finance predicts that the Finnish economy will experience a surge of growth this year and next.
According to a forecast issued on Friday, the country will leave behind the period of weak growth, which still prevailed in the early part of this year.
However, the ministry also slightly downgraded a previous forecast.
In other respects the Ministry’s cyclical survey strengthens expectations of economic improvement. Similar trends came out in a forecast released on Thursday by the Confederation of Finnish Industry and Employers (TT).
In its cyclical barometer, the TT said that Finnish industry is already experiencing an upward turn. One third of companies responding to the questionnaire said that they expect improvements in the coming months.
The ministry of Finance predicts that overall production will grow this year by 2.5%. In March the ministry’s growth forecast was 2.7%; the discrepancy was attributed to the slower-than-expected start of the upturn.
Growth in the early part of this year was slowed by the weak performance of exports and sluggish industrial production.
The ministry nevertheless expects that international economic growth will soon spread to Finland and boost export figures. The ministry expects this year’s exports to grow 2.5%.
The improved prospects should also be reflected in investments, in which the Ministry of Finance expects a moderate increase after two years of decline.
Growth in production is set to fall largely on the shoulders of private consumers.
Consumer demand is getting a boost from tax cuts and slow inflation. Next year the proportion of consumer demand in overall picture of economic growth is expected to be smaller; the ministry predicts that exports next year will grow by 4.5% - considerably more than this year.
The increase in exports is expected to boost the whole economy to 2.8% growth.
In spite of a reduction in the number of jobs in industry and primary production, the unemployment rate is set to go down to 8.8% this year as a result of a decrease in the supply of labour.
Next year’s predicted increase in economic growth is expected to slow down the declining trend in the number of industrial jobs. The Ministry of Finance believes that there will be an increase of 10,000 jobs next year.
