No signs yet of economic upturn in Finland, despite positive glimmers in US

Anssi Rantala

print this

Finnish experts do not yet see the recent positive indicators of some American banks as being very momentous from the point of view of the Finnish economy.
      Anssi Rantala, head economist at Pohjola Bank, says that the direct impact on Finland of a recovery in the US banking sector would be small, but that the indirect effect could be big.
      The United States accounts for only a few per cent of Finland’s export trade, but it has traditionally been the locomotive of the world economy, with a big influence on world trade. As a country that is very dependent on exports, Finland is largely at the mercy of international trade.
      Rantala notes that not even the right kinds of policies and support given for the domestic market will work miracles, as long as exports are in a sharp decline.
     
Offices of the state-owned financing company Finnvera have been trying to handle the flood of applications for business cycle loans and guarantees.
      Granting loans and guarantees to companies having difficulties in getting financing from elsewhere began over a month ago. The target is companies employing a maximum of 1,000 people.
      Loans and guarantees have been granted to the tune of about EUR 34 million.
      “The number of applications has grown rapidly. It is likely that the EUR 300 million earmarked for 2009 will run out before the end of the year”, says deputy managing director Veijo Ojala.
     
Ojala feels that the news from the United States is a positive indicator, but that no similar signs can be seen in Finland yet.
      “Finland’s financial market is not operating normally. Finnvera gets applications for compensatory financing that could have been available from banks under normal conditions.”
     
All recent forecasts in Finland are very grim for this year, and developments at the beginning of the year have been poor.
      “The first quarter will probably be dismal, but then there is, of course, some hope emerging”, ponders Jaakko Kiander, director of the Labour Institute of Economic Research.


Previously in HS International Edition:
  Research institute offers grim economic forecast (4.2.2009)

Helsingin Sanomat