From slot games to sports and a lively music scene, the choice is endless. Everyone who calls Finland home knows that this is only possible thanks to the country’s traditionally stable economy. However, recent times have brought murky waters to Finland’s economic prospects – but what can be in store for the year 2023?
The year 2023 may be difficult for the Finnish economy
Thinking about the year 2023, it already seems that many people are predicting a difficult time for the Finnish economy. This may come as a surprise to some Finns, as the Finnish economy was predicted to grow by around 2.5% in 2022.
It may also raise eyebrows, as preliminary forecasts for 2023 at the start of this year predicted economic growth of around 1.5 percent. However, the Ministry of Finance recently announced that the Finnish economy is predicted to grow by only 0.5 percent in 2023
But why could the next 12 months lead to this situation?
High inflation and rising interest rates
One of the biggest dangers to Finland’s economic outlook for 2023 seems to be a rise in interest rates and continued high inflation.
The expected high inflation affects the purchasing power of consumers in Finland, when people get less for their money. When Nordea Bank predicts that prices may rise five times more than income in the country by 2023, the reality is clear.
The rise in interest rates on mortgages is also a real threat to Finland’s economic prospects in 2023. This is because people pay more for mortgages and have less money elsewhere in the Finnish economy. With the European Central Bank increasing interest rates on cards, this is something to pay attention to.
The energy crisis in the euro is an ongoing problem
Everyone in Helsinki knows that Europe currently has a problem with its energy. The ongoing war in Ukraine and the damage to the Nordstream pipelines have led to energy supply problems not only for the entire continent, but also to an increase in energy prices.
As the rumble of this war progresses, it seems pretty certain that the energy crisis will affect Finland’s economic prospects in 2023. This is of course in a personal sense, when household bills will increase as a result of expensive energy and people will have less money left for other things. . However, the European energy crisis will probably also be a problem for Finnish business life in 2023.
The rise in energy costs may make it difficult for Finnish companies to operate next year and result in them not being able to manufacture goods or simply keep the lights on. If this were to close a lot of companies in Finland, the effects on the entire economy would be enormous.
It’s not all doom and gloom in 2023
Although the above shows some problems for the Finnish economy in 2023, it is not all doom and gloom. After all, the country’s economy performed better than expected in the early part of 2022 – and this cannot be ruled out again.
Tourism could help the country’s economy to remain stable and bring much-needed income. When more and more people begin to realize what Finland has as a holiday destination in 2023, more visitors could arrive to boost the country’s economy.
It is also worth looking at Finland’s relatively high employment rate, which was reported to be 74.20% in August 2022, and see it as a reason for optimism going forward. Recent investments in green energy may also bring better-than-expected times to the national economy in 2023. If the country’s wind power capacity increases and Olkiluoto 3 nuclear reactor is planned to open in December 2022, which can help reduce the energy crisis – and boost the Finnish economy.
What will 2023 bring to the Finnish economy?
The simple truth is that making concrete financial predictions for the future is fraught with danger. However, it seems that 2023 could be a time when Finland will not see much economic growth and will instead focus on staying stable. However, the economic growth of 1.4 percent predicted by the Ministry of Finance for 2024 is hope for the future.
Source: The Nordic Page