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Ministry data-crunchers issue bearish forecast

The Finance Ministry predicts that unemployment will remain stubbornly high in Finland for years to come. Meanwhile Statistics Finland says the number of bankruptcies has dropped by more than 15 percent this year.

Valtiovarainministeri Alexander Stubb
The survey is the first released since ex-PM Alexander Stubb took over as finance minister in late May. Image: Yle

The Finance Ministry has downgraded its prognosis for the Finnish economy, predicting that it will barely grow this year at all.

In its summer economic survey issued on Wednesday, the Finnish Ministry of Finance predicted that GDP will edge up by just 3-tenths of a percent this year, with modest growth of 1.4 percent in the following two years.

Exports to perk up next year

Underlying the nearly stagnant economy is weakness in exports. They, too, will rise by a maximum of 0.3 percent this year, the ministry says. In the two following years, though, it predicts “export growth will accelerate to over three percent as economic growth gathers pace in the euro area”.

The ministry’s number-crunchers don’t offer much optimism for jobseekers. They project the unemployment rate to exceed nine percent this year and remain relatively high for years to come.

Deficit remains in EU no-go territory

State debt, too, will continue to expand for at least the next couple of years despite the new government’s austerity plans. The public-sector deficit will again this year breach the European Union’s three percent of GDP reference value as it did in 2014. However the survey confidently asserts that “the deficit will shrink in response to adjustment measures and rebounding economic growth” and drop back under the allowed threshold in 2016.

Meanwhile Statistics Finland issued one slightly brighter figure on Wednesday: the number of bankruptcies fell in the first five months of this year by 15.5 percent compared to the same period of 2014.

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