Interim forecast: Growth will strengthen as the pandemic recedes

The recovery of the Finnish economy from the COVID-19 crisis has been boosted by stronger-than-expected developments in the second half of 2020.

Newest publication – Published 8 Apr 2021

– Financial stability

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– Release notes

International recommendations help in identifying investment risks and opportunities related to climate change

The goal of the Bank of Finland’s climate work is to spread knowledge and debate around sustainable finance and to enhance expertise in this area.

Increased flood risks caused by climate change will also affect banks

Due to climate change, extreme weather events will become more frequent, resulting in material damage to buildings and other infrastructure. In Finland, for example, this will probably increase the risk of coastal floods.

Economic policy must live in two time frames at once

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.

Accessible summary: 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.

The depths of the COVID-19 crisis, and the recovery

In the Bank of Finland forecast, the COVID-19 crisis is not expected to cause such a deep recession as experienced in the financial crisis, and recovery will be faster. The virus could, however, leave long-term scars on e.g. employment, the capital stock and productivity.

Attention should already be turned to the post-crisis years

Debt will not be halted even when the economy begins to grow again. Moreover, the sustainability gap is now larger. A post-crisis change of direction in the public finances is required.

Forecast for the Finnish economy in charts

View, save, and share the most thought-provoking charts from the latest issue of Bank of Finland Bulletin.

Forecast tables for 2020-2023 (December 2020)

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.

Blog

On fireside chats and optimal monetary policy

On 24 November, Bank of Finland hosted a webinar focusing on monetary policy challenges both in the euro area and in the United States.