Acting Head of Forecasting, Juuso Vanhala: Finland’s economy gradually moving out of recession, 11 June 2024

Acting Head of Forecasting, Juuso Vanhala
Bank of Finland
Press conference on the outlook for the Finnish economy
Helsinki, 11 June 2024

1. Juuso Vanhala
Monetary Policy and Research Department, Bank of Finland
Finland’s economy gradually moving out of
recession
Bank of Finland Bulletin press briefing
11 June 2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
11.6.2024 1

2. Finland’s economy moving out of recession
211.6.2024

3. Finland’s economy gradually moving out of recession
•The economy grew only slightly in
the first quarter of 2024
•Many indicators point to slow
growth in the first half of 2024
•Gradual recovery in growth towards
the end of 2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
311.6.2024

4. Finland will return to slow growth
•Growth will be weak in the first half of
2024
•Residential construction continues to weigh on investment
•Consumption is held back by the low level of confidence,
fiscal adjustment measures and persisting high prices and
interest rates
•Near-term outlook for exports is weak: orders, expectations
and capacity utilisation rates are low
•Domestic demand will support growth in 2025–
2026
•Consumption will gradually increase as purchasing power
strengthens
•Investment will pick up as demand recovers
•Exports will improve, but net exports will remain modest
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
411.6.2024

5. Stronger purchasing power will support private consumption
5
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
Alternative scenario:
‘Finland’s economy will improve more than
expected’
by Mikko Sariola, Hannu Viertola, Harri Pönkä
11.6.2024

6. Investment will recover in 2025
611.6.2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED

7. Recovery in export markets will boost Finnish exports
•Finland's export market shares will continue to
decline in 2024
•Exports will strengthen in 2025– 2026
•Impact of net exports will remain minor
Feature articles:
7
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
‘Impact of the collapse in trade with Russia on the
Finnish economy’ by Heli Simola
‘Finnish goods exports have difficulties in defending their market shares’ by Petri Mäki- Fränti
11.6.2024

8. Unemployment will gradually decrease
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
811.6.2024

9. Inflation has slowed, price pressures remain moderate
911.6.2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED

10. Earnings growth will slow slightly
1011.6.2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED

11. Weak cyclical conditions make it difficult to rebalance public
finances
11
-0.7
-0.9
-0.9
-5.6
-2.8
-0.4
-2.7
-3.8
-3.3
-2.9
-8
-6
-4
-2
0
2
4
6
2008 2013 2018 2023
Central government Local government
Social security funds General government net lending
Sources: StatisticsFinland and Bank of Finland (forecasts).
% of GDP
© Suomen Pankki, 22 May 2024, 38284@JulkinenTalous EN
Generalgovernment net lending
11.6.2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED

12. Debt-to-GDP ratio will grow sharply in 2024 but at a
slower rate after that
12
11.6.2024
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED

13. Finland’s economy moving out of recession
13
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
11.6.2024

14. Thank you!
[email protected]
Juuso Vanhala | Monetary Policy and Research Department, Bank of Finland
Public | BOF/FIN- FSA-UNRESTRICTED
14
suomenpankki.fi
11.6.2024