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Unemployment fall gives cause for cautious hope, claims economist

Confederation of Finnish Industries economist says unemployment may have peaked following 0.7 percent fall this June compared to a year earlier, but warns against expecting a return to previous levels of growth.

EK:n johtava ekonomisti Penna Urrila.
Penna Urrila from the Confederation of Finnish Industries said that Wednesday’s unemployment figures are a sign of an economic turnaround. Image: Marjut Hentunen

A prominent Finnish economist has called for quiet optimism as new unemployment figures showed a slight fall in the number of jobless in June.

Penna Urrila, Chief Economic Policy Adviser at the Confederation of Finnish Industries, said that Wednesday’s announcement that unemployment fell to 10 percent this June from 10.7 percent a year earlier gives cause for optimism, but he warned against expecting a return to previous levels of growth.

Unemployment figures for June released by Statistics Finland showed that 16,000 fewer people were out of work than one year ago, bringing the number of unemployed down to 264,000. Meanwhile 33,000 more people were in work this year compared to 12 months previously.

”Last year unemployment was forecast to grow towards ten percent, but now the rise has stopped,” Urrila told Yle. “We still have a long way to go before reaching healthy employment figures, but of course this does create a small amount of optimism.”

Urrila said he believes Finland’s economy has turned towards slight growth, and insists this is cause for positivity.

“In Finland we’ve slightly forgotten that Europe, led by Germany and Sweden, has been travelling in the right direction for some time now. Finland is now slowly starting to join them.

Modest growth expected

On Wednesday the newspaper Helsingin Sanomat reported that the government has set a target of increasing the employment level in Finland from its current level of 68.5 percent to 72 percent. Urrila says this would require the creation of 100,000 jobs.

The economist, who represents Finland’s leading business pressure group, said the key to spurring economic growth was to do more to boost Finnish exports and encourage inward investment.

But he said that growth figures for the years to come are likely to remain modest, given the shrinking working-age population in Finland.

"Even with a strong, productive economy, we cannot expect to return to the old days of three to four percent growth, except in exceptional situations,” Urrila said.

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