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.

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.

According to the Bank of Finland’s assessment, Finnish GDP will contract by 4.7% in 2020. Even though the recession appears to be shallower than feared in the spring, it is still deep, and recovery will be slow.

The outlook for both the global economy and the Finnish economy deteriorated suddenly and sharply in the spring of the current year on account of the coronavirus pandemic. The Finnish economy is forecast to contract around 7% this year. Recovery will be gradual.

The corona crisis will have a deep impact on the Finnish economy. Exports are importnt to Finland, and the contraction in exports will damage the economy. With households also consuming less, businesses, and therefore employment, will suffer.

Finland’s economic boom is over and growth will slow temporarily, in step with global developments. The foundations for continued growth are, however, still in place. Monetary policy continues to be accommodative, and households’ purchasing power is growing.

Finland’s economic growth will be slower during the next three years. Growth has also slowed in the euro area and elsewhere around the world. However, there are still possibilities for growth in the Finnish economy.

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.