Country Economic Forecasts > Finland

Revised figures showed economic growth ground to a halt in Q2, down from the 0.3% expansion reported initially. This was not surprising; we warned last month that initial GDP estimates in Finland are often subject to revision. But it was also accompanied by an upward revision to Q1, so we have kept our 2016 GDP forecast at 0.9%. For 2017, we see growth at 1.2%, also unchanged from last month.The GDP breakdown showed that domestic demand continues to perform better than expected, with both household spending and fixed investment up strongly in Q2. But we think the current pace will be difficult to maintain as unemployment is still high and wage gains remain modest. Meanwhile, the outlook for the external sector remains dominated by the recession in Russia, which is weighing on exports and tourism. But export figures appear to be bottoming out as the Russian economy is starting to recover, so the spill-over effects should start to fade in H2 this year and into 2017.