Finland’s economy continues to grow

Finland’s economic recovery is broad-based and should strengthen next year, although energy prices and weak consumer confidence remain key risks.

• GDP grew by 0.5% quarter on quarter and 1.8% year on year in the third quarter, matching Nordea’s forecast; the bank expects 1.7% growth for the full year.
• Output growth has been broad-based across trade, services, industry and construction, while retail sales volumes have continued to rise despite higher inflation and interest rates.
• Technology products, pharmaceuticals and large ship deliveries have supported goods exports, and strong export orders point to continued industrial production growth.
• Imports have increased with domestic consumption and investment, including a sharp rise in IT equipment imports for data-centre projects; specialised construction is strong, but residential construction remains weak.
• Employment growth is subdued, vacancies remain modest and unemployment is above 10%; Nordea expects unemployment to decline next year as growth accelerates to 2%.

Takeaway: The outlook is for a continued recovery led by exports, investment and construction, but rising energy prices and interest rates could weaken consumption by reducing purchasing power and confidence.