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Bumper tax payout to get Finnish consumers to splurge on Christmas

Consumers will spend significantly more money on gifts and other holiday items than they did last year, a Nordea survey finds.

Helsingin Aleksanterinkatu jouluvaloissa.
Image: Henrietta Hassinen / Yle

Citing fresh figures from a survey Nordea Bank commissioned about holiday spending plans of consumers, the bank's economist Olli Kärkkäinen said expectations haven't been this high since 2012.

"A year ago I was wondering about why [the country's] strong economic growth and record-high consumer confidence levels weren't being reflected in planned Christmas budgets. Now it can be seen," Kärkkäinen said.

However, it is not only economic growth which is behind the projected extra spending. This year more than 3.6 million Finnish residents will receive tax refunds on 11 December, amounting to a total of nearly three billion euros.

Refund recipients are expected to get approximately 100 euros more from the taxman than they did last year, reflecting an average increase of 10 percent.

One-in-three of survey respondents said they would spend part or all of their tax refunds on the holidays, according to Nordea.

"The tax refunds play an important part in the holiday shopping season. This year 2.9 billion euros will be paid out, which is 13 percent more than last year. This will certainly be seen in holiday retail sales," Kärkkäinen said.

However, a rejig of the tax system next year Finland will see tax refunds distributed in August, which could affect Christmas spending in 2019.

100 euros more than last year

The holiday spending survey found that consumers aged 18-65 plan to drop an average of 580 euros apiece on the holidays this year, or about one hundred euros more than last year.

About 340 euros will go towards gifts, while 240 euros will be spent on other holiday costs like food and decorations.

According to the survey the most common gifts people are planning on giving include chocolates and sweets, toys and books.

Fewer than ten percent of respondents said they plan to at least pay for some of their holiday purchases using a credit card or other form of credit.

Three percent of respondents who said they observe Christmas are not planning to give any gifts this year.

The survey was carried out by market research company YouGov, and asked around 1,000 people in Finland about their holiday spending plans.

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