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.

Euro area productivity growth has been slowing since the turn of the millennium. Economic policy that bolsters stability in the economy is a vital factor for productivity growth.

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.

Finnish growth will continue, but at a slower pace than in recent years. There is no returning to the growth rate that preceded the financial crisis.

Rainy-day buffers ought to be strengthened during years of solid growth, so that fiscal space is available for tackling future recessions and other unwelcome surprises.

The euro area’s monetary policy stance is conducive to economic growth and employment in Finland.