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Think tank forecasts slower growth for Finland

A Finnish economic research institute has forecast economic growth will slow down next year to 2.4 percent amid concerns about looming trade wars.

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PTT expects some 30,000 more people to enter the workforce in 2019. Image: Henrietta Hassinen / Yle

Finnish GDP growth will slow next year to 2.4 percent after hitting 2.6 percent this year, forecasts the PTT Economic research institute.

PTT says employment has increased during the current upswing, with some 75,000 more people in work in July than a year earlier. That growth is set to continue next year, with another 30,000 people in work by July 2019, according to PTT.

That would bring the unemployment rate down to seven percent, but PTT says further reductions may be difficult as it’s harder to get people back into work if they have been out of the labour force for long periods.

Another concern is reduced spending on research and development, which PTT says could make productivity gains harder to achieve.

“It’s difficult to increase the productivity of work with the current investment model, that’s a cause for concern about adding more value in the near future,” said Janne Huovari of PTT.

PTT also expressed concern over the potential for slower global economic growth due to trade wars and tariffs, especially between the United States and China.

PTT’s forecast decline in growth is less steep than others, with Nordea predicting a one percentage point drop in economic growth in 2019.

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