Danske Bank almost doubles growth forecast for Finland

Danske Bank has upgraded its growth forecast for Finland in 2017.

The Nordic financial services provider announced yesterday that it has raised its growth forecast for the year to 2.8 per cent on grounds of the better-than-expected growth and recovery of exports and investments witnessed in the country over the first few months of the year.

“The growth has taken us by surprise,” admits Pasi Kuoppamäki, the chief economist at Danske Bank.

“As good a piece of news as the upswing is, the gross domestic product remains almost four per cent lower than at its peak before the financial crisis. We still have a lot of catching up to do, and what we are witnessing is mainly a burst towards the potential output of the economy,” he adds in a press release.

Danske Bank in March stated that it expected the economy to expand by 1.5 per cent year-on-year in 2017.

Kuoppamäki points out that the positive development will bring greater stability to households in Finland. “The employment situation is improving, and the unemployment rate is getting closer to eight per cent. [...] Low interest rates will continue to alleviate the situation of indebted households,” he lists.

The purchasing power of consumers, however, is only expected to improve modestly due to rising inflation, reminds Kuoppamäki.

Danske Bank also revealed that it expects exports to grow by seven per cent and investments by six per cent year-on-year in Finland in 2017 – the latter being driven increasingly by an up-tick in industrial investments.

“The turnaround in exports has been more robust than we dared to expect,” tells Kuoppamäki.

“The Finnish gross domestic product could in the best-case scenario achieve a growth rate of over three per cent in 2017, if the growth in exports continued and industrial investments picked up further in the latter part of the year,” says Danske Bank.

Aleksi Teivainen – HT

Photo: Anni Reenpää – Lehtikuva

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