Helsinki: ‘Only vaccines will bring a clearer outlook’

Even though the Finnish economy has been less struck by the coronavirus pandemic than many other nations, the country’s economy will nevertheless shrink by 4.5% this year, according to an economic survey published by Finland’s finance ministry on Monday.

Predicted is a slow recovery which might gather pace if the pandemic can be harnessed and a possible COVID-19 vaccine becomes available.

The finance ministry is expecting the Gross domestic product (GDP) to grow by 2.6% in 2021 and by 1.7% the year after. While private consumption industries will recover first and fast from the pandemic, exports and industrial production will not grow until next year.

According to the survey, unemployment for 2021 will rise to 8.2% at most.

The following year, demand for labour is expected to grow gradually and earnings will rise by about 2%, while the increase in consumer prices will remain moderate.

Like in the rest of Europe, Finland’s general government deficit will grow substantially. In 2020, it will add up to about €18 billion, which accounts for about 7.7% of the GDP. Although this is partly due to the pandemic, structural factors such as the ageing population are also to be taken into account.

“The economy is at a turning point, as the pandemic has reared its head again. The recovery threatens to be delayed if households and businesses take a gloomier view of the way ahead. Only effective treatment or a vaccine will bring a clearer outlook,” said Mikko Spolander, Director General of the economics department at the finance ministry.

(Pekka Vänttinen |

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