Finance Ministry revises growth forecast downward due to paper dispute
Unemployment to decline more than expected
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The labour dispute in the Finnish paper industry, which ended in July, is expected to reduce growth in GDP by one percentage point, according to revised figures at the Ministry of Finance. This amounts to about EUR 1.5 billion.
The ministry lowered its forecast for this year's growth to two percent in its cyclical assessment published on Friday. In May the growth forecast was three percent, and in March it was 3.3%.
The overall impact of the stoppages on overall production was nevertheless less than feared, even though total production in the second quarter of this year did not grow at all. Exports of electronics have grown considerably all year.
The unemployment rate is expected to go down to eight percent this year, and to 7.5% next year. The unexpectedly good situation is mainly attributable to the fact that economic growth has created more jobs than before.
"Another reason is the stop in growth in the supply of labour, which is the result of the age structure of the population", says Hannu Jokinen of the Ministry of Finance.
The proportion of those of working-age in the population is declining as the postwar baby-boom generation heads into retirement.
The Ministry of Finance says that state finances remain in balance, and that some of the state debt has been paid off. However, tax breaks are slowing down the growth in tax revenues.
Helsingin Sanomat
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| 1.8.2005 - TODAY |
 Finance Ministry revises growth forecast downward due to paper dispute |
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