Nordea raises Finnish growth forecast to 3.5%

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In its September 2010 Economic Outlook, published on Monday, the Nordea banking group forecasts that the Finnish economy will grow by 3.5% in 2010. The prediction has been revised slightly upwards, as in the last Outlook the annual rate of growth was estimated at 2.7%.
      According to Nordea, next year growth will fall away temporarily, but the brisk figures from the second quarter of 2010 will mean that the momentum continues enough to ensure around 3% growth in 2011.
      "The dip in growth will be short-lived and the pace of the economy will start to pick up again towards the end of next year such that GDP growth will reach 3.5% again in 2012", Nordea reports.
     
"Relatively strong demand from domestic consumers sets the position in the Finnish economy apart from much of the eurozone. Finland nevertheless lives by its exports and export competitiveness really must be kept on a par with that of Germany to ensure that Finland's position is not eroded", notes Nordea economist Reijo Heiskanen.
      The Economic Outlook seems to suggest reasonably good times ahead, with a summary that reads:
      "After a slow start in 2010, the Finnish economy began to gain momentum in the spring. Also, the outlook for the rest of the year is favourable. Next year, growth will begin to slow down relative to the brisk figures of H2 2010. In 2011, average GDP growth will be a little slower than this year."
      "On the whole, the trend in Finnish economy will be reasonably favourable in the next few years. Despite the broadness of the past recession, its impact has been fairly mild. GDP growth fell sharply, but the level of unemployment remained much lower than feared. Moreover, the general government deficit probably stayed below the EU's 3% target, and next year the general government finances will again be close to balancing."
     
The Nordea analysts estimated that the global economy will grow by 4.1% this year, slipping back to 3.5% in 2011 (a downgrading from an earlier figure of 3.8%).
      The Nordea figures for Finland are appreciably higher than those contained in a Ministry of Finance bulletin from June of this year, perhaps reflecting the sharp pick-up in the economy in recent months.


Links:
  Nordea Economic Outlook September 2010 (.pdf file)
  Nordea
  Ministry of Finance, Economic Bulletin June 2010

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