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Finance Minister Kulmuni: Finland ready to spend if coronavirus hits economy

Finnish growth was forecast at 1 percent in 2020, but is now expected to be lower.

Valtiovarainministeri Katri Kulmuni puhuu eduskunnassa.
Katri Kulmuni says the government is ready to loosen the purse strings if novel coronavirus has a significant impact on the economy. Image: Roni Rekomaa / Lehtikuva

Finland is ready to direct resources to stabilise the economy if it takes a hit from the novel coronavirus outbreak, according to Finance Minister Katri Kulmuni.

Speaking to financial journalists in Helsinki, Kulmuni said that she expects growth to be lower than forecast this year.

"The forecast for [economic] growth this year was one percent," said Kulmuni. "It’s clear that growth will be smaller than that."

On Wednesday the Finance Ministry said it was calculating the likely impact of novel coronavirus on economic growth, and it expects to publish the updated forecasts in mid-April.

Sweden has already lowered economic growth forecasts, and said it stands ready to stimulate the economy if needed.

Kulmuni said the government had discussed taking similar action, and said that if it was necessary it would come via a supplementary budget.

She didn’t anticipate it as necessary yet, however.

"I don’t see a need at this stage to use the additional stimulus mechanism written into the government programme," said Kulmuni.

That mechanism allows the government to increase spending if the economy contracts by at least one percent in two consecutive quarters.

On Thursday Finland announced five new novel coronavirus infections, bringing the country's total to 12.

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