Finland's economy will grow by some 1.2 percent, according to a fresh economic forecast by the Finnish Ministry of Finance which was published Friday.
The ministry said that confidence in the economy's future - by companies and citizens alike - are essential to growth of the GDP. Improvements in the job market have increased consumer spending, the ministry said, saying that increasingly, residents in Finland are considering buying a home.
"The main drivers of growth in 2017 are a broad-based rise in private investment and an increase in confidence-driven private consumption," the ministry said in a statement published Friday.
"Private investment growth is driven by business expansion and replacement investments as well as by consumer housing purchase intentions. Private consumption growth is supported not only by strong consumer confidence, but also improving employment. Export growth prospects are bolstered by strengthening global export demand and improving business cost competitiveness," the ministry said.
Global effect on domestic improvements
The ministry said overall improvements in the global economy helped increase Finland's exports figures.
"Economic growth is strengthening in industrial countries, but it is the emerging economies that are mainly responsible for driving the global economy to growth of almost 4 percent," the ministry said.
The ministry also said implementation of the so-called competitiveness pact will help to further boost the country's export figures, saying that labour costs are decreasing as a result of the pact.
Additionally, long-term unemployment figures are no longer rising, the ministry said, and that overall unemployment figures are headed downwards. The Ministry predicts that employment will improve by 0.5 percent a year, and the employment rate will rise to 70 percent in 2019.
The ministry forecasts that growth during the years of 2018 and 2019 will continue, but at a slower rate than this year. It said the economy will grow about one percentage point during each of those years.
However, the ministry warned that even faster growth could take place.
"The Finnish economy may grow faster than predicted if the strong early monthly data on exports, output and confidence in Finland turn out to be sustainable," the ministry said."
"If household confidence remains high, private consumption growth could be faster than predicted, which would bolster economic growth. As a result the high level of household debt would rise further," the ministry said.