Economic Bulletin 2/2011

• Economic Bulletin 2/2011
  20.12.2011  |  pdf, 539 Kt

Summary

The GDP growth forecast for the current year is 2.6%. Next year, growth will slow to 0.4%, suggesting the possibility of recession. In 2013 GDP growth will reach 1.7%. Economic recovery in Finland will depend largely on domestic demand.

The slowdown of growth will add to imbalances in the Finnish economy. In this situation it is essential that measures are put in place to foster market-driven growth.

Dwindling international and domestic demand is also reflected in investment demand. Private investment is projected to contract by 1½% in 2012. The investment to GDP ratio will start falling again in 2012.

Unemployment will begin to edge up in 2012. With the demand for labour on the decline, the unemployment rate will rise to 8.1%. Despite the decrease in the number of employed persons, demographic changes mean that the employment rate will not fall in 2012.

The volume of private consumption will increase by ½% next year. It is expected that household uncertainty will be reflected in the structure of consumption. Demand for consumer durables will start falling in 2012.

The annual change in consumer prices is expected to come in at 2.7% in 2012, as the more subdued economic outlook means there is less upward pressure on consumer prices. Nonetheless inflation is running higher in Finland than in many of its competitors. On the other hand the increases agreed under the comprehensive wage settlement last November were slightly higher than expected, which certainly does nothing to ease producer cost pressures.

The public finances deficit will deepen to -1.4% of GDP in 2012. The debt to GDP ratio will increase by just over one percentage point solely for the reason that the value of GDP is more than EUR 4 billion lower than previously forecast.

Language versions

• Suhdannekatsaus 2/2011
  20.12.2011
• Konjunkturöversikt 2/2011
  20.12.2011

Printable version