Finland’s economy set to grow 1.4% this year, 1.5% next year

Finland’s economy is expected to grow by 1.4% this year and 1.5% next year, according to an economic forecast by Pellervo Economic Research PTT, as reported by Yle.

PTT chief executive Markus Lahtinen said the recovery remained on uncertain foundations.

“Finland’s economy is starting to grow, but the continuation of that growth is uncertain. Repeated conflicts, trade wars and the replacement of a rules-based system with the rule of the strongest have created a storm in the global economy, in which Europe is too weak and divided to navigate,” Lahtinen said in a statement.

Growth is being supported especially by favourable developments in the technology and chemical industries, the rising trend in defence and a boom in data centres.

Weak domestic consumption and difficulties in residential construction continue to weigh on growth.

Fighter jets and data centres boost imports

PTT said some of the growth had also been driven by exceptional factors, including value-added tax linked to fighter jet purchases and high refining margins for fuel products.

The research institute said large imports and investment transactions made Finland’s economic development more difficult to interpret because they were changing the structure of growth and the statistics.

Examples include the Finnish Air Force’s new F-35 fighter jets and some of the equipment used in data centres.

“Fighter jet purchases explain a significant share of the strong development in investment this year. However, corporate investment is also expected to grow clearly this year and next year,” said Veera Holappa, a senior economist at PTT.