Report: Finland’s economic growth set to slow down

Experts say that a trade war between America and China would be a disaster for Finland.

File photo: economy, finance, business and banking / Credit: iStock Photo

Finland’s economy is still growing, but for how much longer?

A new study from think tank Pellervo out today says that economic growth will continue albeit slower than recently.

Economic growth for 2018 is predicted to be 2.6% while next year it’s forecast at 2.4%. By comparison, last year’s economic growth was 2.8%.

“Last year the European average growth rate was less than 2%, so we are fairly over it, but we need to remember that the boom started here in Finland later than generally in Europe, so it might also last also a bit longer than elsewhere”, says Janne Huvari, Pellervo’s Head of Economic Forecast.

Employment rates rising

Employment rates have also risen steadily since the end of last year, with about 75,000 more people in jobs in a year, and the study says this has been reflected clearly in lower unemployment rates.

Pellervo predicts that unemployment will fall to 7% next year.

But while unemployment falls, and employment rates improve, there is still much to be done for long term unemployed people say Huovari.

“The core of unemployed are most often long-term unemployed, people who haven’t been in the labor market so long time. So finding a job for them has always been harder regardless of economic growth” he tells News Now Finland.

There has also been some skepticism about the quality of economic growth, as the government’s new active model started this year, which forced unemployed people to take temporary work, of face cuts to their benefits. However, the new report finds that working hours hours have improved approximately at the same rate as employment growth.

Trade war is worst case scenario

Today’s Pellervo also highlights the risks of a trade war between the USA and China, which would be a threat to Finland’s economic growth.

“Finland’s economy is dependent on exports and if the worst scenario, trade war, took place, the changes would be visible very quickly” says Huovari.