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The economy of the euro area has held on this year amid the considerable trade policy and geopolitical uncertainties. The tariff agreement reached by the EU with the United States has reduced the general uncertainty felt by businesses and consumers, but the tariff increases will weaken economic growth.

In early 2025, the Bank of Finland conducted a survey on the prospects, benefits and risks of quantum technology in the financial sector. Based on the survey responses, quantum tech-nology has the potential to reshape business activities significantly in the long term. Only a few tests and practical trials have been conducted so far, however, as the technology is im-mature. As the opportunities of quantum technology, respondents cited the improvement of risk management and information security and the development of investment activities. In-formation security was also highlighted among the risks, however.

In mid-July, European Union countries adopted their 18th sanctions package of economic and individual measures against Russia. The latest batch of sanctions seek to further degrade Russia’s ability to pursue its war of aggression in Ukraine and support EU efforts to end the war.

Trade policy and uncertainty will slow the growth in Finland's economy. A clearer improvement in economic conditions will not be seen until 2026. Employment will gradually improve. Inflation will remain low.

A trade war escalation would significantly weaken Finland’s exports and economic growth. By contrast, an easing of trade policy tensions would cause Finland’s exports and economic growth to pick up.

Inflows into the labour force have been higher than outflows in recent years. This has led especially to a rise in employment, but in recent years also a simultaneously high unemployment rate.

Along with many other European countries, Finland intends to increase its defence spending. This would increase Finland’s public expenditure and spur economic growth. The larger the share of defence procurements purchased from within the euro area, the more favourable the impact.

Risks to financial stability are growing due to global power politics. Finland’s financial system has shown strong resilience, and this must continue as we move forward.

Finland’s country risk has remained low, and the weakened security situation has not been evident in investor behaviour. Stable institutions and efforts to reduce government debt help keep country risk in check.

A trade war would pose challenges for exporting companies in particular. Nevertheless, the debt-servicing ability of companies in Finland is good, for the most part. The greatest difficulties have been faced by small businesses and by sectors such as construction.

Finnish mortgage borrowers coped well with their loan servicing costs during the period of steep rises in interest rates. Borrowers should ensure they are prepared for various kinds of financial risks in the future too.

Europe needs its own means of retail payment and more competition. Whereas domestic payment solutions have emerged in Europe, in Finland payment is almost entirely dependent on international card payments.

Finland has a long-standing tradition of building preparedness across the sectors in society. The comprehensive approach to preparedness supports the resilience of the financial sector and society as a whole. In preparedness work, Finland needs Europe and Europe needs Finland.

Growth in the Finnish economy is gradually picking up, but the trade war will slow the economic recovery. Households and businesses are still cautious because of the uncertainty in the global economy. Growth in the global economy will strengthen gradually, and this will boost Finland’s exports.

The Finnish economy will grow this year by 0.5%, and by 1.5% in 2026 and 1.6% in 2027. Inflation will stay below 2% in the immediate years ahead.

The analysis of Russian household survey data finds that overall subjective well-being and financial security have improved on average during 2022-2023 but with interesting disparities. Ethnic Russians and those in military-industrial regions have experienced notable gains, whereas retirement aged and highly educated have gained less if at all.

Global risks that are hard to predict have increased. The authorities in Finland should be allowed to ensure that banks accumulate buffers against unforeseeable risks. Europe must ensure that businesses have a broader range of options for financing investments.

Russia’s decision to start a war in Ukraine has eroded its economic growth potential and deteriorated its business environment. These problems will remain long after sanctions are lifted.

Russia’s government finances are very sensitive to changes in global oil prices. Last year, oil & gas earnings accounted for about 30 % of total federal revenues and 16 % of consolidated government revenues.