Bank of Finland articles on the economy
Bank of Finland Bulletin 4/2019 - Economic outlook for the global economy
Published 3 Oct 2019
pdf, 528 kB
Bank of Finland Bulletin 3/2019 - Economic forecast for the Finnish economy
Published 11 Jun 2019
pdf, 7.32 MB
How can we avoid a negative equilibrium of low growth and low inflation?3 October 2019, Bank of Finland Bulletin 4/2019
Slower-than-target inflation and a persistent decline in inflation expectations are key challenges for monetary policy. A negative equilibrium of prolonged low inflation and zero interest rates would fundamentally weaken monetary policy’s room for manoeuvre in balancing fluctuations in the economic cycle.
Public finances need more room for manoeuvre19 June 2019, Bank of Finland Bulletin 3/2019
Active measures to strengthen the public finances should be taken when the economy is in good heart.
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According to the forecast, Finland’s economic growth will be slow and well behind that of the euro area. Foreign trade is not recovering as expected, and growth will continue to depend on domestic demand. There will be no significant improvement in the public finances.
Traditional export sectors still the main pillars of foreign trade. Viewed historically, factors that have usually led to a speedy recovery of exports, are now lacking.
The ageing households spend less of any additional income on consumption than the young. Population ageing may weaken the impact of interest rate changes on the economy.
The international economic situation, Finland’s problems with competitiveness and the uncertainty surrounding economic policy could, according to the forecast’s risk assessment, mean a slower pace of investment and export recovery.
Global economic and trade growth in the immediate future will be slower than previously forecast. The Russian economy is contracting, and in China, too, the pace of growth has slowed.
Immigration will bring about a more favourable age structure, as the vast majority of immigrants are young adults. The impact on the public finances will depend on how successful immigrants are in finding work.
According to the Bank of Finland’s assessment of the country’s public finances, the growth in public debt is a cause for concern. Finland’s long-term outlook for growth is weak, and expenditure is increasing apace.
Since the financial crisis, consumer prices in Finland have been rising faster than in the euro area on average until recent months.
The alternative scenario assesses developments in the Finnish economy if exports turn out to be much weaker than in the forecast baseline.
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