Economic Bulletin 1/2011

• Economic Bulletin 1/2011
  20.06.2011  |  pdf, 464 Kt

Summary

The GDP growth forecast for 2011 is 3.9%. The figure is predicted to slow to 2.8% in 2012 and further to 2.4% in 2013. Domestic demand will emerge as the most significant driver of growth during the outlook period. Exports will remain relatively robust, but their contribution to economic growth will decline.

The projected growth rate will not be enough to correct the imbalances in the Finnish economy in the near future. Firm economic policy measures are needed to rectify the situation.

The employment situation is expected to improve slowly during 2011. The number of employed persons will increase by 1.5% and the unemployment rate edge down to 7.7%. The number of long-term unemployed will continue to rise. The projection is that by 2013, the average number of employed persons will be 74,000 higher than in 2010. Measures should be put in place to increase the supply of labour because the number of people of working age will decline throughout the outlook period.

The outlook for private investment demand is good. Investment in the national economy is growing faster than GDP, and the investment rate will climb back almost to the average level for 2000-2008.

In 2011 consumer prices will rise by 3.4%. Inflation will ease towards the end of the outlook period, but still remain relatively high. A vicious cycle of rising costs would certainly jeopardize the growth that has now resumed.

Public debt will continue to rise. Central government borrowing requirements will remain unchanged at EUR 7-8 billion per annum. With debt levels also continuing to rise in the local government sector, the general government debt to GDP ratio is expected to climb to 52½% by 2013, or almost EUR 50 billion more than before the recession in 2008.

The favourable economic situation, increased indirect taxes and the unwinding of stimulus measures will improve the state of public finances in 2011. In the absence of new measures to improve the budgetary position of general government, the deficit in public finances will remain more or less unchanged.

Language versions

• Suhdannekatsaus 1/2011
  20.06.2011
• Konjunkturöversikt 1/2011
  20.06.2011

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