Wednesday, January 11, 2017
The Finnish Central Bank Has Declared The Recession To Be Receding – Many Indicators Of Brighter Times Ahead
Via Business Insider: Excepting the southern member states, Finland suffered the worst economic contraction of any country in the Eurozone after the financial crisis in 2009. Not until recently did the Finnish central bank declare that it seems Finland’s long recession is finally receding. “An improving employment situation and low inflation will bolster real disposable household income. Exports will recover amid better competitiveness and higher external demand”, claimed the Finnish central bank. The bank does however point out that the ageing population of Finland, will continue to curb the country’s growth. Finland’s GDP growth for 2017 is forecasted to 1.3%, according to the Bank of Finland’s recently published Outlook for the Finnish economy. It’s not much, but it’s positive. And while the employment situation may be described as improving it is still critical. Since 2010, the number of long term unemployed has increased dramatically. 15% were long term unemployed out of the total of unemployed in 2010. Today the number is 35%. “When the economy is able to renew itself by improving productivity and generating jobs, this will boost economic growth and the outlook for the public finances”, said central bank governor Erkki Liikanen. Despite these mitigating factors, there are currently several indicators of a brighter future for Finland ahead, according to the Finnish central bank. First of all, the labour market has grown stronger and the competitiveness has improved (due to the Competitiveness Pact). Finnish consumers are confident about the country’s economy and the last months the confidence has kept growing stronger, according to Statistics Finland. The last time Finnish consumer confidence was this high was in 2011. There has also been a decreasing amount of bankruptcies the past 3 years, and 2016 showed an improvement of 8% compared to the previous year. December had a record low amount of bankruptcies, according to Hufvudstadsbladet – the number hasn’t been as low in ten years. The same positive trend is seen when it comes to payment defaults. For the second year in a row the amount has decreased amongst Finnish businesses. The amount of companies with a registered payment default decreased by 4.000 during last the year compared to the year before (from 56.000 to 52.000). While there are definitely indicators a brighter future for Finland, the biggest source of uncertainty remains: the global economy. So Finland’s near future ultimately depends on the rest of the world.