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Ministry Revises Growth Figure; Warns of Inflation

The Finnish Finance Ministry has increased significantly its forecast for this year's economic growth. However, it says inflationary dangers are on the horizon.

Economic growth for this year is now forecast at 4.3 percent. In March, the GNP growth forecast stood at 3.1 percent.

An Estimate of next year's growth is now put at 3.2 percent.

Economic growth is being stimulated by an improvement in employment. However, the Ministry also warns of inflationary problems due to agreed wage and salary rises.

Strong international economic growth unhindered by a downturn in the U.S. economy is behind the upgraded growth predictions for the Finnish economy. On the other hand, continued brisk growth and an increase in oil prices could lead to pressure on central banks to raise interest rates.

The Finance Minist ry prediction is clearly higher than other forecasts. For instance, a recent growth estimate by Nordea Bank predicts a growth rate this year of 3.5 percent this year, and of 3.3 percent next year.

A total of 40,000 new jobs are expected to be on offer this year and the unemployment rate is forecast to drop below 7 percent this year.

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