The economy will grow if policy mistakes are avoided

The economic growth prospects are favourable, but several sources of uncertainty cast a shadow over the outlook. These arise firstly from international political risks. In the United States, the source of risk is widespread scepticism about the success of the new president’s economic policy. In Europe, the concern is the popularity of populist movements and, at the same time, distrust directed at the euro system. Economic indicators point to an acceleration of growth in Finland and elsewhere, but there remains at least for the time being a clear disparity between “soft” and “hard” growth indicators. According to our forecast, the Finnish economy will nonetheless recover. In 2017–2018, exports will grow as export demand strengthens and as a result of improved price competitiveness and the economy’s creative renewal. Investment growth will also continue at a moderately brisk pace, and the low interest rate environment will support private consumption. However, domestic economic policy also involves risks. During the forecast period, the government’s ability to maintain unity in its key structural reforms will be put to the test. In the labour market, the challenge is to achieve a managed round of collective bargaining in a situation where the export-led wage model and the required form of wage coordination remain unresolved. (AI translation)

• Press Release in Finnish
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