Finland’s economy is set to sink deeper into recession in 2013 according to the nation’s central bank, contradicting its previous predictions that the Finnish economy will post modest growth in what was one of the Eurozone’s strongest performing economies.
Economists had expected the downwards revision but the banks forecast of a contraction of 0.8% is being considered more pessimistic that those of other financial institutions. Even the European Union had been expecting growth of 0.3% in the Finnish economy.
Finland is one of only a few European countries still to have a prestigious AAA credit rating, but as economic weakness grows more pronounced in the country we can expect to see that rating come under threat.
The Central Bank, which in December had forecast a 0.4% expansion in gross domestic product this year, also cut its growth estimate for 2014. The Bank is forecasting that GDP in the country will grow by 0.7%, far slower than its earlier forecast of 1.5% and saw growth picking up by 1.4% in 2015.
“The performance of the Finnish economy in recent months has been more muted than expected and consumer confidence has weakened again,” the Bank of Finland said in a report. Bank of Finland governor Erkki Liikanen said that traditional Finnish industries are struggling to compete with foreign rivals, exacerbating the economy’s slowdown.
“The Finnish economy has faced two major changes at the same time: the restructuring of its industry and the recession in the wake of the financial crisis” Liikanen said.
Despite the downgrade of Finland’s expected growth the Bank of Finland believes that the global economy had improved in recent months and that the threat of a revival of the financial and debt crisis that have plagued the Eurozone seems less likely to occur.
Euro (EUR) Exchange Rates as of 15:00pm GMT –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3263
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8510
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4154
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6990