At last we have seen some really positive news about global growth that is helping Finland show much improved growth prospects for the next couple of years.
The Ministry of Finance’s economics chief, Mikko Spolander, has has just adjusted GDP growth up to 2.4% for this year, and 1.6% and 1.5% for the following 2 years. MoF forecasts are generally rather cautious – we could even see better growth later.
Even though this will not stop the long-term increase in borrowing, the situation is never-the-less a big improvement over their last forecast in April.
GDP growth expected to be 2,4% in 2017…
Significant growth has been seen in exports with a broader spread of goods. This is excellent news for the country, along with the general improvements in labor productivity.
The Finance Ministry is still worried about high unemployment and long-term unemployment but there are policies in the making that are hopefully on track after the summer break.
Finland normally takes the summer vacation in July.
Mikko Spolander said that this is just the right time now, with these improved figures, for the government to implement measures to reduce unemployment by attempting to secure more flexibility into the labor market, improve the possibilities for labor to move more easily around the country, and do everything possible to keep wage demands at reasonable levels.
It will be interesting to see if the government has the strength of will to push through these needed measures.
The recent wage increases in Sweden and Germany are way above what we have seen in Finland this last 6 months.
The government’s debt has doubled since 2008 and now stands at around 60% of GDP. Finns can thank the EU Vice-President Commissioner Mr. Katainen, for this development since it was on his watch as Finance Minister and Prime Minister in Finland between 2007 and 2014.
Finally, there are some interesting thoughts about Brexit with positive implications for Finland. We export quite a more investment goods than consumer products to the UK. Foreign direct investment has has almost stopped in its tracks there as companies rethink the location of their plants. This means that there are excellent opportunities for Finnish investment goods exporter to turn to other parts of Europe as companies seek to relocate or expand their plants because the UK is less attractive as a manufacturing centre!
Call it beggar your neighbour, but business is business!
The Brits are digging their own graves, with Prime Minister May & Co. playing a loud Fanfare on their trumpets about “Freedom from the shackles of Europe!” while London bridge is falling down…
Read other news on the city site of Helsinki.