The Bank of Finland (BOF) has revised its growth forecast for Finland for next year to 2.6 percent. According to a federal report, the central bank noted that the economy is still recovering from the severe downturn caused by the Covid-19 pandemic.
However, the recovery is being slowed by a worsening virus situation, a lack of raw materials and electronic components, and an increase in the overall level of prices. In September, the Bank predicted that the country's growth rate in 2022 would be 2.8%. The bank believes that if the pandemic situation improves in the near future, the outlook will improve.
Households may begin spending their pandemic savings, and corporate investments may grow faster than expected. By 2024, the rate of economic growth in Finland will have slowed to 1.3 percent due to the ageing population structure and the slow rate of labour productivity growth.
The Covid-19 crisis has resulted in increased debt in Finland's public finances. The economy's recovery will aid in reducing the deficit. However, the public finances will remain in deficit at the end of the forecast period, according to the bank. In Finland, inflation will remain at 2.1 percent this year, 2.0 percent in 2022, and 1.6 percent in 2023. The bank forecasted that energy prices would begin to fall and supply bottlenecks would ease next year.
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