Finnish Economy Faces Darkest Hour Next Year, Danske Bank Says
Finland’s economy, mired in recession together with the rest of the euro area, will reach a trough next year, Danske Bank A/S (DANSKE) forecast.
Gross domestic product growth will stagnate this year and grow 0.5 percent in 2013, Danske Bank said in an e-mailed report. In 2014, GDP will expand 2.2 percent.
“Finland’s economy won’t reach clear growth before 2014,” Juhana Brotherus, an economist at the bank in Helsinki, said in the report. “Until then, unemployment will increase, real house prices will decline, the public debt ratio will rise and the current account will stay in deficit. As the saying goes, the darkest hour comes just before sunrise.”
Finland’s economy fell into a recession in the second quarter as domestic demand fails to uphold an expansion amid a slowdown in exports as global growth eases. Companies including Metso Oyj (MEO1V) and Rautaruukki Oyj (RTRKS) have cut jobs amid the downturn.
The unemployment rate will rise to 8.2 percent next year from 7.7 percent in 2012, before declining to 7.9 percent in 2014, Danske Bank said. Inflation will slow gradually to 2.8 percent this year, 2.5 percent in 2013 and 2 percent in 2014, the lender said.
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