Finnish economy to recover in 2024

The Finance Ministry of Finland has projected that the country’s economy, which has experienced stagnation in the current year, will return to growth in 2024. This growth is expected to be driven by increasing global demand and a peak in interest rates. The ministry predicts a GDP growth rate of 1.2% for 2024, slightly lower than the 1.4% forecast made in June. Furthermore, it anticipates an expansion of 1.8% in 2025.

This economic outlook presents a relatively more positive scenario for Finland compared to some recent economist assessments. The Bank of Finland had previously stated that the economy would only grow by 0.2% in the following year, while Nordea Bank Abp lowered its 2024 growth forecast from 1% to zero. These adjustments were attributed to sluggish global demand affecting export industries and a slowdown in residential construction.

Despite the challenges posed by weak construction, the Finance Ministry remains optimistic about investment prospects, particularly citing wind power investment plans as a promising area.

Additionally, a decrease in the inflation rate is expected to benefit Finnish export industries. Inflation is projected to ease to 2.2% in the coming year, down from the current year’s 6.2%.