Bank of Finland predicts deeper but shorter recession

Today, March 15, Bank of Finland released forecast for the state of the Finnish economy. He predicts that the recession will be deeper than previously expected. According to the new forecast, in 2024, Finland’s GDP will contract by 0.5%; in December, the Central Bank predicted a contraction of only 0.2%. Last year, GDP fell by 1%. Thus, the economic decline in Finland turned out to be one of the worst in Europe.

At the same time, according to the forecast of the Bank of Finland, the exit from the recession will be faster than previously expected and will begin at the end of this year. GDP growth in 2025, according to the current forecast, will be 1.7%, in 2026 – 1.5%. The earlier forecast was for growth of 1.5% and 1.3%, respectively. “Although economic indicators were worse than expected, the outlook for the future remains unchanged. The recession has already bottomed out and we expect growth to begin to recover this year as household purchasing power strengthens and we begin to see a recovery in confidence levels in the overall economy,” said Meri Obstbaum, director of forecasting at the Bank of Finland.

Previously Reuters wrote, that the EU economy barely avoided a technical recession in the last three months of 2023. The decline in German GDP was offset by strong GDP growth in Portugal and Spain, as well as a strengthening in Italy.

Read more about the current economic situation in Germany in the material “One-tenth of a recession”.

Yana Rozhdestvenskaya