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Economy and Finance

Economic forecast for Finland

The latest macroeconomic forecast for Finland. 

In the first quarter of 2022, Finland’s real GDP growth slowed down but remained strong, partly due to an increase in inventories. Russia’s war of aggression against Ukraine, international sanctions, surging inflation and declining consumer sentiment weighed on exports and private consumption. Imports declined at a slower pace compared to exports, bringing net exports into negative territory. At the same time, real GDP growth was supported by increases in investment, especially linked to the construction sector, and government consumption. The labour market remained strong and is set to continue performing well over the forecast horizon.

Last update : Summer 2022 Economic Forecast (14/07/2022)

Indicators2020202120222023
GDP growth (%, yoy)-2,23,01,81,2
Inflation (%, yoy)0,42,16,42,8

Overall, real GDP growth is forecast to reach 1.8% in 2022 and 1.2% in 2023. Continued geopolitical tensions, further increases in raw material prices and overall price levels, as well as tighter financial conditions, make the economic outlook somewhat bleaker than projected in spring. Domestic demand is forecast to remain the main growth driver, though private consumption growth is expected to slow down over the forecast horizon. On the other hand, exports are projected to gradually pick up towards the end of the forecast horizon.

HICP inflation reached 4.8% y-o-y in the first quarter of 2022 and was driven mainly by strong energy and food price increases. The latest inflation data suggest that increases in energy prices start driving other HICP components upwards. Consequently, core inflation is expected to accelerate as well. Overall, HICP inflation is projected to reach 6.4% in 2022 and fall back to 2.8% in 2023.