Monetary policy is supporting economic recovery — but the outlook for employment remains weak Monetary accommodation has opened up space for other economic policies in the euro area, which needs to be put to good use by pursuing economic reforms. Productivity and employment growth ultimately rest on our ability to reform. Share Email Twitter Facebook Linkedin Google+
Monetary policy implementation in changing times Over the past decade the tools for implementing monetary policy have become ever more diverse. These measures now include refinancing banks at favourable terms and large-scale asset purchases. Share Email Twitter Facebook Linkedin Google+
The worst-case scenario in the corona spring did not materialise, but we will still need stamina for the long haul 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. Share Email Twitter Facebook Linkedin Google+
Regulation has strengthened the financial system’s resilience Financial institutions' solvency and liquidity positions have been strengthened since the global financial crisis. A well-functioning banking sector together with government relief measures will bolster the economy's outset for growth once the crisis subsides. Share Email Twitter Facebook Linkedin Google+
Finland’s economic transition still incomplete The Finnish economy is still going through a period of transition in which it has to adjust to two large structural realignments. Share Email Twitter Facebook Linkedin Google+
How can we avoid a negative equilibrium of low growth and low inflation? 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. Share Email Twitter Facebook Linkedin Google+
Public finances need more room for manoeuvre Active measures to strengthen the public finances should be taken when the economy is in good heart. Share Email Twitter Facebook Linkedin Google+
Rising household debt levels must be addressed in time Finnish households have a worrying level of debt. Advance measures should be taken to prevent the accumulation of excessive debt. Share Email Twitter Facebook Linkedin Google+
European Central Bank strengthens monetary policy accommodation – ECB monetary policy strategy needs to be reviewed A review of the ECB’s monetary policy strategy is due in light of the latest economic research and the changed operating environment. Share Email Twitter Facebook Linkedin Google+
Now is the time to strengthen the public finances and the foundations for productivity growth The euro area’s monetary policy stance is conducive to economic growth and employment in Finland. Share Email Twitter Facebook Linkedin Google+
Monetary policy normalisation to proceed carefully and with measured pace In times of uncertainty, prudence is justified in the normalisation of monetary policy. Share Email Twitter Facebook Linkedin Google+
Monetary policy remains accommodative, net asset purchases about to end Finland’s public finances have gathered strength; the general government deficit has shrunk and the ratio of public debt to GDP has begun to contract. Yet determined efforts are still required to address the challenges to fiscal sustainability in the long term. Share Email Twitter Facebook Linkedin Google+
Rising household debt poses risk to the economy The risks relating to high household indebtedness are realised when indebted households respond to the threat of payment difficulties by sharply reducing their consumption. Share Email Twitter Facebook Linkedin Google+
Continued accommodative monetary policy supports the return of the inflation rate towards the price stability objective Euro area inflation remains subdued, but confidence in inflation converging towards the ECB's objective has strengthened. Owing to these uncertainties, the conduct of monetary policy in the euro area rests on patience, persistence and prudence. Share Email Twitter Facebook Linkedin Google+
Editorial: Growth potential and public finances need further strengthening 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. Share Email Twitter Facebook Linkedin Google+
Editorial: Accommodative monetary policy to continue until a sustained adjustment in the path of inflation is reached The amount of underutilized domestic capacity is expected to gradually be taken up, and the global economy's generally favourable outlook will support growth in the euro area. Together these factors support expectations that the inflation rate will slowly return to the policy objective. Share Email Twitter Facebook Linkedin Google+
Editorial: Measures to strengthen the economy still needed The faster growth will ameliorate the problems in the economy, but not solve them. The industrial base has narrowed, unemployment is high and the public finances are in deficit. It is important to continue the corrective measures in the economy. Share Email Twitter Facebook Linkedin Google+
Editorial: Shortcomings in the macroprudential toolkit and changes in the banking sector increase financial system risks Structural changes in the banking sector may have an impact on risk spillovers between the Nordic countries. Share Email Twitter Facebook Linkedin Google+
Editorial: ECB to continue highly accommodative monetary policy A very substantial degree of monetary accommodation is still needed in the euro area for underlying inflation pressures to build up and support inflation in the medium term. More Bank of Finland Bulletin articles will be published in the beginning of April. Share Email Twitter Facebook Linkedin Google+
Editorial: Monetary policy will continue to support price stability and growth After a prolonged period of weakness, the Finnish economy has begun to recover. When the economy develops the capacity to renew itself in such a way that productivity improves and employment opportunities are generated, the growth outlook will improve. At the same time the risk of increasing marginalisation and lack of opportunities will be reduced. Share Email Twitter Facebook Linkedin Google+
Editorial: Monetary policy supports growth in conjunction with other economic policy Thanks to the Eurosystem’s comprehensive monetary policy measures, monetary conditions in the euro area are favourable. GDP is expected to grow at a reasonable pace in the immediate years ahead, and the pace of inflation is expected to gradually accelerate. Share Email Twitter Facebook Linkedin Google+
Editorial: Monetary policy supports Finnish recovery The growth in private demand that has bolstered the economy has been accompanied by continued growth in the levels of household debt. Risks relating to this can be controlled centrally using macroprudential policy. Share Email Twitter Facebook Linkedin Google+
