Thu, 24 Jun 2021

HELSINKI, May 12 (Xinhua) -- Finland's economy is projected by the country's Finance Ministry to grow 2.6 percent this year, 2.5 percent in 2022 and 1.5 percent in 2023.

In a statement issued on Wednesday, the ministry revised its December 2020 forecast upwards. It predicted last December 2.5 percent gross domestic product (GDP) growth for 2021, 2.0 percent for 2022 and 1.4 percent for 2023.

The OP Financial Group, one of the country's largest financial companies, on Wednesday also raised its growth forecast for this year from three percent to 3.3 percent, and for 2022 from 2.6 percent to three percent. On Tuesday, Nordea Bank kept its 2021 growth forecast at three percent but raised the 2022 forecast from two percent to three percent.

Mikko Spolander, director general of the Economics Department at the Ministry of Finance, said in a press release that Finland's economy would return to "normal" in 2022. He added, however, that "regrettably, in Finnish public finance, 'normal' means the slow decline of an aging population, sluggish growth and a chronic deficit in the public economy."

The ministry expects the public sector deficit to shrink markedly in 2022, when the recovery support measures are scheduled to be discontinued. However, the deficit will remain high in the mid-2020s and the ratio of public debt to GDP will continue to grow.

Jukka Railavo, senior financial adviser at the ministry's Economics Department, was quoted in the press release as saying that in 2020 Finland's economy shrunk less than predicted. "Industries, commerce and construction delivered a positive surprise," he noted.

Railavo underlined that the determination to curb the COVID-19 pandemic and the associated support measures have played a major role in the recovery of Finland's economy.

The ministry's 2021 forecast is based on the assumption that the pandemic would be over by this autumn, household savings would go up and companies would start investing. The ministry does not expect the inflation rate to rise, according to the press release.

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