The Bank of Finland forecasts that Finland’s GDP will grow 3.1% in 2017, 2.5% in 2018 and 1.5% per annum in 2019–2020. Growth will be broadly based and amplified by exports. A more positive current account will lay a foundation for sustainable growth.
Population ageing will push up public expenditure at the same time as the contraction in the working-age population reins in economic growth. The sustainability will remain around 3% of GDP.
According to a new structural unemployment indicator based on labour market flows developed by the Bank of Finland, unemployment in Finland is currently close to its structural level.
Economic decisions increasingly require the support of real-time information. Help can be derived from short-term forecasting models (nowcasting), which are suitable for processing continuously updated data and using it to form an overall picture of the current state of the economy.
During the third quarter of 2017, Finland’s GDP increased by 3%, private consumption by 2.1% and public consumption by 1.8% year on year. Investments increased by 9.3%.
Investment growth has been bolstered by e.g. the quickening of domestic demand and construction activity as well as monetary policy. There has been a substantial increase in exports, for example to Germany and China.
Well-educated people typically earn more than those with a lower level of education. Education also improves earnings by enhancing a person’s employment prospects.
In order to sustain economic growth and improve the employment situation over the long term, it is vital that Finland’s cost-competitiveness continue its favourable trajectory into the coming years. Meanwhile, the situation in the public finances can be eased by implementing structural reforms.
