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The outlook for both the global economy and the Finnish economy deteriorated suddenly and sharply in the spring of the current year on account of the coronavirus pandemic. The Finnish economy is forecast to contract around 7% this year. Recovery will be gradual.

Consumer confidence has long been depressed by weak assessments of the outlook for the Finnish economy. Changes in consumer confidence can foreshadow a turning point in the economy and they therefore attract close attention.

The Finnish, Swedish and German economies weakened almost simultaneously in March. The latest indicators show signs of a pick-up, but uncertainty will slow the recovery.

Most Finnish companies have suffered a drop in turnover as a result of the corona crisis. Service industries are hard pressed. Cost adjustments and funding arrangements have saved jobs.

Healthy public finances provide an irreplaceable shield when we hit hard times. It is important to focus the fiscal policy stimulus effectively and take forward structural reforms. Finland’s labour market, too, has a vital role to play as the economy enters the recovery phase.

The Finnish economy will contract by around 7% this year and grow around 3% per annum over the next 2 years. The forecast contains a large degree of uncertainty – the contraction could be only 5% or as much as 11%, depending on how the pandemic develops. See forecast tables for the Finnish economy in 2020–2022 (June 2020).

The corona crisis will have a deep impact on the Finnish economy. Exports are importnt to Finland, and the contraction in exports will damage the economy. With households also consuming less, businesses, and therefore employment, will suffer.