Economic outlook

Economic policy in Finland must find a way to live in two time periods at once. While we are currently combating an acute crisis, we must at the same time direct our thinking strongly towards the economic challenges of the post-crisis years.

COVID-19 will gradually be left behind in the course of 2021 due to the vaccines, and private consumption will generate growth of 2.2% in the Finnish economy. This will strengthen to 2.5% in 2022.

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.

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).