HELSINKI, Sept 15 (Reuters) – The Finnish economy is growing at a quicker pace than previously projected, driven by exports and investment, and is likely to push unemployment down from the current double-digit level, the country’s central bank said on Tuesday.
Finland, which is due to hold an election for parliament in 2027, has seen years of stagnation as domestic fiscal austerity and neighbouring Russia’s war in Ukraine weighed on the Nordic country’s growth.
But the Bank of Finland (BoF) now projects that GDP will grow by 1.7% this year and by 1.6% in 2027, up from 0.7% and 1.2% seen in June, it said. The central bank also revised up last year’s growth to 0.8% from 0.2%.
“The performance of the Finnish economy in the first part of the year was stronger than previously forecast. The increase in exports and investment is creating the conditions for more widespread growth,” BoF Head of Forecasting Juuso Vanhala said.
The central bank projected the unemployment rate this year to remain almost unchanged at 10.4%, but said rising demand for labour is expected to bring it down to 9.8% in 2027 and a further decline to 9.0% in 2028.
Inflation will rise this year to 2.4% due to higher energy prices caused by the conflict in the Middle East, but the increase is expected to be temporary, easing to 1.4% in 2027, BoF said.
In a boost for the economy, Alphabet’s Google said last week it will invest at least €13 billion ($15 billion) in AI infrastructure in Finland over the next two years, the U.S. group’s biggest European investment.
($1 = 0.8654 euros)
(Reporting by Elviira Luoma, editing by Terje Solsvik)
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