Finland's central bank lifts growth forecast as exports and investment recover
The Bank of Finland has raised its growth projections on stronger exports and investment, while flagging a temporary inflation bump from energy prices.
Finland's economy is on a firmer footing than earlier expected, with the country's central bank raising its growth projections on the back of stronger exports and investment.
The Bank of Finland said GDP is now forecast to expand by 1.7% this year and 1.6% in 2027, up from the 0.7% and 1.2% it had projected in June. Growth for last year was also revised higher, to 0.8% from 0.2%.
"The performance of the Finnish economy in the first part of the year was stronger than previously forecast. The increase in exports and investment is creating the conditions for more widespread growth," said Juuso Vanhala, the central bank's head of forecasting.
The upgraded outlook follows several years in which the Nordic economy was held back by domestic fiscal austerity and the effects of neighbouring Russia's war in Ukraine.
On the labour market, the central bank expects the unemployment rate to stay close to its current level this year at 10.4%. Rising demand for workers is then projected to pull it down to 9.8% in 2027 and to 9.0% in 2028.
Inflation is seen climbing to 2.4% this year, driven by higher energy prices linked to the conflict in the Middle East, before easing to 1.4% in 2027 as the pressure proves temporary.
Separately, Alphabet's Google said last week that it will invest at least €13 billion ($15 billion) in artificial intelligence infrastructure in Finland over the next two years — the U.S. company's largest such investment in Europe.