HELSINKI: Finland's economy is being harmed by the ongoing Russia-Ukraine conflict, thecountry's Ministry of Finance said.

According to reports, Finland's possibility of entering a recession, which occurs when the country's gross domestic product (GDP) falls for two consecutive quarters, are increasing. As per Economic Survey released by the Ministry on Friday, rising inflation is impeding economic development. According to the survey, Finland's GDP will expand by 1.4 percent this year, 1.1 percent in 2023, and 1.3 percent in 2024.

Finland's growth rate was 3.5 percent in 2021.

"The economy will recover from Covid-19 and, eventually, from the war, but the prognosis remains gloomy. Lifting the economy onto a more favourable and environmentally sustainable growth path while strengthening public finances requires the ability to successfully compete for investments among our peers "Mikko Spolander, Director General of the Ministry, said.

Inflation in Finland is expected to be 5.8% in 2022, limiting households' real purchasing power. Increased energy prices, and growing food prices are the main causes of rising inflation. Prices of goods and services have risen in response to rising energy and raw material costs.

Finland's strong employment rate has kept household earnings and purchasing power stable. Private consumption, on the other hand, will slow in 2023 as employment growth slows, it said.

Last year, a large imbalance in the Finnish public economy caused by the Covid-19 outbreak and the ensuing restrictive measures started to fade.

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