Ministry of Finance Revises Growth Forecasts
According to a new forecast by the Ministry of Finance, the recession has bottomed out, and economic activity is recovering. Despite the overall improvement in the economy, unemployment is expected to rise next year.
With the improving prospects, the ministry has raised its forecasts for economic growth in 2010 to 0.7 percent, up from 0.3 percent in a previous forecast. In 2011, growth is expected to accelerate to 2.5 percent.
On the other hand, it now believes that the economy contracted by 7.6 percent this year, which is worse than the previous forecast of -6 percent.
The number of people who are employed in Finland is decreasing this year by 80,000, while the number of people listed as unemployed is growing by 50,000. In spite of the turnaround in the economy as a whole, the unemployment rate is expected to grow next year, reaching 10.5 percent.
Joblessness Remains a Problem
The ministry predicts that inflation will remain moderate for the next two years. Wage earners’ pay is going up by four percent this year and slightly less in the next two.
The state’s financial position is weakening at a record-high rate this year. Municipal finances are also weakening, and are expected to remain weak next year as well in spite of an unexpectedly high increase in municipal taxation.
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