The Finnish economy is both directly and indirectly adversely affected by Western sanctions and the general reluctance to cooperate with Russia. Sakari LähdemäkiDirector of Laboratory Forecasting.
“Directly through the drying up of Russian trade and indirectly due to the deteriorating economic outlook across Europe.”
“Finland’s economic growth is maintained by private consumption and investment. The employment situation continues to develop positively, but at a slightly slower pace and earnings will grow moderately over the forecast horizon, ”he said. added.
Labore said its forecast is based on four key assumptions: Finland’s success in finding new export and import markets to offset most of Russia’s trade, the war not spreading beyond Ukraine, the persistence of sanctions throughout the forecast period and the dramatic slowdown. Long-term trade with Russia.
Private consumption is forecast to grow this year, despite rapid inflation, as the coronary virus pandemic has left households with significant savings. The pandemic is not expected to have a significant impact on consumption towards the end of the year, and households are starting to dig up their savings.
The employment situation is also improving further, which will increase consumption.
Labore estimates that growth in the eurozone will remain stable this year and relatively stable next year, despite the adverse effects of the war in Ukraine. Additional EU sanctions on oil and natural gas, for example, would weaken the outlook for monetary union, especially if sanctions are maintained for a long time.
“The war is accelerating already high inflation as a result of the coronary virus pandemic, putting pressure on tighter monetary policy in the eurozone. According to our forecasts, interest rates will rise in the euro area in 2022–2024, ”Lähdemäki said.
Aleksi Teivainen – HT
Source: The Nordic Page