Finance Ministry: “Not that bad…”

The Finance Ministry Trio, Mikko Spolander, Jukka Railavo, and Marja Paavonen (photoed above) came out today with their regular update of the Finnish economy, and it was not that gruelling as expected…

Yes, the timing of the recovery will be uncertain because we need to kill off the virus first, but the economic damage is not as great as they expected earlier this year.

The economy will fall by 6% in 2020, and 2021 should see GDP growing by almost 3% – growth being pushed forward by private consumption. However time will be needed before that returns to more normal levels.

The manufacturing, service and the primary production sectors will all show growth next year but investments will be dampened by a weak construction sector, according to the Trio…

They expect employment to pick up again after this year as people start to find new jobs and the employment rate should return to 72%, which is still a rate that is far below where we should be standing…

Public debt has increased like everywhere else in Europe but it is still manageable. It should probably peak in 2024 at 74% of GDP. This figure is high but not a disaster compared to most of the European countries with the exception of Sweden.

Finland has three big challenges – an ageing population, a weaker export sector than our Nordic neighbours, and the need to make some reforms in healthcare and in the labour market. Protectionism, sanctions, a growing threat of a new Cold War, Brexit, a growing refugee crisis, and Climate Change were not mentioned in the press conference but they are additional threats to a soft landing for this small Nordic country.

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