Finland economy rebounds with 0.4% growth in Q2

Finland’s economy showed signs of a continued rebound in the second quarter, with GDP expanding 0.4 per cent from April to June, following a 0.2 per cent growth in the previous quarter, according to Bloomberg citing Statistics Finland.

Despite this positive development, GDP contracted 0.7 per cent year-on-year, adjusted for working days.

Finland has struggled economically due to the disruption of trade with Russia following its invasion of Ukraine and reduced demand for exports from key partners like Germany and Sweden.

Domestic challenges, including higher inflation and interest rates, have also impacted household spending.

While there are signs of a fragile recovery, with a slight improvement in the second quarter, economists warn that strong, sustained growth is still some way off.

Indicators suggest a more substantial turnaround may not be seen until 2025, with construction and investments expected to boost the economy in the coming years.

The Finnish government’s €9 billion austerity plan aims to balance public finances and create 100,000 jobs.

However, Fitch Ratings recently downgraded Finland’s credit outlook, criticising the plan’s insufficient measures to address the budget deficit. Despite these challenges, forecasts suggest Finland could see growth of 1.6 per cent in 2025 and 1.5 per cent in 2026.

Attribution: Bloomberg

Subediting: M. S. Salama