The financial consequences of the war in Ukraine have also affected the Finnish economy. From October to December 2022, the amount of Finnish exports decreased by 2.9 percent from the level of the previous quarter, while imports decreased by 2.4 percent. However, for the whole year, Finland’s economy grew by 2 percent compared to 2021.
The government and the central bank predict that GDP will decrease slightly in 2023, around 0.2 percent, before growth returns in 2024 and 2025, according to their latest December forecast. However, experts warn that the forecast may be uncertain, given the margin of error in economic forecasts.
Although Sweden has not seen two consecutive declines in gross domestic product, its economy still shrank by 0.2 percent in the last quarter compared to the same period a year earlier, according to statistics agency SCB. The decline was felt in many parts of the economy, as corporate investments and household consumption declined widely. In the whole year 2022, the Swedish economy grew by 2.6 percent, SCB said. Sweden’s central bank expects GDP to contract by 1.1 percent this year, in line with the European average, according to its latest forecast published in early February.
Despite Finland’s technological decline and Sweden’s economic challenges, economists suggest that the term “technical recession” is a poor indicator of the real economic situation. Niku MรครคttรคnenThe professor of macroeconomics at the University of Helsinki said that there is no universally accepted definition of an economic recession. Instead, the term should be used when economic activity declines significantly and widely based on several key indicators such as production, employment, consumption and investment.
The big picture of the Finnish economy is that next year it is expected to grow to zero. The impact of inflation and the economic consequences of the war in Ukraine on consumer and business confidence is expected to continue to affect Finland’s economic growth. The uncertainty of economic forecasts highlights the need for caution in the interpretation of economic data and the importance of considering several indicators when assessing the health of the economy.
HT
Source: The Nordic Page
