Finland raises economic growth forecasts

HELSINKI: Finland’s finance ministry nudged up its economic growth forecasts for 2021 and 2022 on Wednesday, citing the recovering global economy and easing coronavirus pandemic.

Finnish gross domestic product ( GDP) will expand 2.6 per cent in 2021 and 2.5 per cent in 2022, the finance ministry said in its economic outlook. In December the ministry had estimated the economy would grow 2.5 per cent this year and 2 per cent in 2022.

The economy appears set to return close to normal during 2022, ministry’s Director General of the Economics Department Mikko Spolander said in a statement.

“Unfortunately, ‘normal’ in public finances means gradual growth impacted by an aging population, weak growth outlook and a chronic deficit in public finances,” he added.

The Finnish forecasts are also lower than growth forecasts for the eurozone, which the European Commission on Wednesday raised to 4.3 per cent this year and 4.4 per cent in 2022.

Finland’s economy contracted 2.8 per cent in 2020, a much smaller fall than the 6.6 per cent drop recorded in the eurozone.

Finland’s general government debt is expected to total 177 billion euros at the end of 2021, the ministry said.

The ministry now expects the public debt to grow from 70 per cent of GDP to 75 per cent by 2025 and cross the 100 per cent mark by 2030.

Finnish energy company Fortum reported first-quarter operating profit slightly above forecasts on Wednesday helped by its German holding Uniper and high power prices.