Bank of Finland articles on the economy
Bank of Finland Bulletin 4/2019 - Economic outlook for the global economy
Published 3 Oct 2019
pdf, 3.44 MB
Bank of Finland Bulletin 3/2019 - Economic forecast for the Finnish economy
Published 11 Jun 2019
pdf, 7.32 MB
How can we avoid a negative equilibrium of low growth and low inflation?3 October 2019, Bank of Finland Bulletin 4/2019
Slower-than-target inflation and a persistent decline in inflation expectations are key challenges for monetary policy. A negative equilibrium of prolonged low inflation and zero interest rates would fundamentally weaken monetary policy’s room for manoeuvre in balancing fluctuations in the economic cycle.
Public finances need more room for manoeuvre19 June 2019, Bank of Finland Bulletin 3/2019
Active measures to strengthen the public finances should be taken when the economy is in good heart.
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Finnish growth will continue, but at a slower pace than in recent years. There is no returning to the growth rate that preceded the financial crisis.
Rainy-day buffers ought to be strengthened during years of solid growth, so that fiscal space is available for tackling future recessions and other unwelcome surprises.
Weak productivity growth raises domestic production costs and hinders the competiveness of export firms as well as economic growth.
Weak productivity developments are being caused by structural changes in the economy, such as the decline of ICT manufacturing, and by the slowing of productivity growth within industries themselves.
The number of low-productivity firms in Finland is large, but average productivity is being raised by a small pack of frontrunners. Even in such frontier firms, productivity growth is mostly torpid.
Finland’s debt-to-GDP ratio doubled after the financial crisis. This trajectory is now on the decline, but population aging will raise public expenditure, and threatens to tilt the debt ratio upwards.
Finns have consumed at levels above their incomes, accumulating more debt than new wealth. Household saving is nevertheless similar to that of the other Nordic countries.
The macroprudential toolkit needs to be replenished with borrower-based instruments that take into account loan applicants’ repayment ability and are able to curtail household indebtedness as a whole.
Forecast tables for the Finnish economy in 2018–2021 (December 2018).
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