Finland's GDP is set to shrink by eight percent this year, according to ETLA Economic Research (Etla), a business lobby-backed research organisation.
The industries which will suffer the most will be the hotel and restaurant services sectors, which are set to contract by about 30 percent this year, according to the lobby's economic outlook on various sectors published on Monday.
Outside of the hotel and restaurant industries, other service sector businesses will also suffer losses caused by the coronavirus crisis. These sectors include the logistics and warehousing industries, whose valuation is expected to drop by 20 percent according to Etla.
Meanwhile, the group said it does not expect the retail sector to be as hard-hit, but projected that activity will still decline by around 10 percent, according to lead researcher Markku Lehmus.
"Consumption levels of individual households will drop by about six percent," Lehmus said.
Slow transition and weakened exports
However, Etla did note that it expected the country's GDP to rebound by four percent in 2021, and researcher Ville Kaitila said he believes the habits of Finnish consumers to gradually return to normal
"It will take some time, but according to our forecasts, consumer behaviour in the market will normalise around 2023. It all obviously depends on when we can return to normal after the coronavirus epidemic," Kaitila said.
Meanwhile, the country's automotive industry exports will drop by one-quarter in 2020. Vehicles are one of Finland's chief exports to Germany and other countries, according to the report.
However, in 2021, vehicle exports will grow by 30 percent. This is partly because Finnish workers in the sector have only been furloughed for about a month, while many of their counterparts abroad have been off the job for longer periods, Etla explained.
Finland is expected to deliver one new luxury cruise ship this year, and three others in 2021.
The expected growth in vehicle exports next year will chiefly be due to revenues raked in just from the sales of those three cruise liners, according to Etla.
Government bailouts vital, Etla says
Meanwhile, the electrical appliance and electronics sector is expected to contract by around 10 percent. While the country's exports of timber products will drop by an anticipated 15 percent, the business lobby said that the paper industry will not be as severely affected.
Head researcher Lehmus said that while the economic prognosis was not bright, the outlook would be even worse without the support packages offered by the government.
"Without those major support measures, we'd be headed towards a recession similar to the one we had in the 1930s," he said.
Etla noted that it was very challenging to predict exactly how the coronavirus crisis will affect various sectors, and added that its projections were only indicative.
EDIT 27.5.2020 This article originally described Etla as a 'business lobby' in the lead. We have altered that to reflect the fact that the organisation conducts research, not lobbying.