Higher interest rates are beginning to bite
Especially households with high debts in relation to their income may come under particluar strain in the near future, as both loan servicing and other daily costs are rising at the same time.
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Finnish economy set to slide briefly into recession
Growth in Finland’s economy will stall temporarily due to Ukraine war and energy crisis. High inflation is weakening consumers’ purchasing power and general confidence in the economy. In the public finances, spending will continue to exceed revenues.
Energy crisis pushing up general price level – Adverse impact on economic growth still to come
The euro area is under strain due to the energy crisis. The area’s economy will also be unable to rely on world trade to bolster it.
Ukraine war is slowing growth in Finland’s economy and fuelling rise in prices
Russia’s war in Ukraine is curbing economic growth worldwide. Finnish households will reduce their consumption of products and services due to uncertainty and rising prices.
Russia’s invasion reminds us that the financial system needs to be well prepared to bear risks
Unpredictable events like war and pandemics may threaten the stability of the financial system. The system must be able to function even in stormy conditions.
Finnish economy growing fast, but pace will slow in near future
The Finnish economy is growing at a good pace. Growth is overshadowed in the short term by COVID, and in the long term by factors such as the ageing population.
Euro area economy now recovering quickly, but after-effects of COVID-19 crisis still visible
Inflation, or the rise in the general level of prices, has accelerated due to the rise in commodity prices and the recovery in the economy. Inflation will slow next year. Monetary policy will be used to ensure that inflation remains stable.
Pandemic eases and economy begins to grow
The vaccinations will ease the virus situation and at the same time stimulate economic growth. Households will be able to consume more freely once the pandemic eases. The economy is also growing elsewhere around the world and this will boost Finland’s exports.
COVID-19 is accelerating the payment revolution
Cash payments have been on the decline for years now, but the pandemic has accelerated the process. Mastering new payment methods will require financial literacy. Authorities must make sure that new services are secure.
Housing market risks growing in the shadow of the COVID crisis
The banks have coped well during the pandemic and have been able to provide credit to businesses and households. Very long loan durations are a cause for concern. New tools are needed to rein in the build-up of debt.
The economy will recover from the pandemic, but even after recovery, growth will be slow
Vaccines bring hope of an end to the COVID-19 crisis, but recovery will be slow. In the immediate years ahead, household consumption will drive the economy, but exports and investment will remain sluggish.
Economic uncertainty continues, recovery expected to be uneven
The corona pandemic has seriously weakened the euro area economy and the outlook remains uncertain. Recovery will be affected by e.g. how successful the balance between the virus and the economy turns out to be, and how quickly confidence improves.
The Bank of Finland implements the ECB’s accommodative monetary policy in Finland
In Finland monetary policy is implemented by the Bank of Finland. Central banks have traditionally conducted monetary policy through interest rates. These days, they stimulate the economy by lending to banks at favourable terms and purchasing securities.
Finland’s economy will gradually recover from the sudden shutdown
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.
Now is the time to deploy the rainy day buffers
The poor outlook for the economy is weighing on banks, households and firms. Banks have accumulated buffers for a rainy day that should be deployed now as the coronavirus buffets the economy.
The economic boom is over
Finland’s annual economic growth will slow temporarily. The difficulties in the global economy will also affect Finland. The prerequisites for growth are, however, still in place. See our accessible summary.
Only very subdued growth in sight
Global growth has slowed substantially during the course of the current year. One cause of this has been the trade war between the United States and China. Brexit, too, has added to the uncertainty surrounding the future course of the economy.
Finland’s growth to slow – contributing factors both international and domestic
Read our accessible assessment of the Finnish economy for the years 2019–2021.
Household debt burden worryingly large – we must take a variety of measures to guard against the risks
The accessible summary sums up the solutions presented in the Bank of Finland’s stability assessment that can get a grip on households’ excessive debt levels.