Finnish economy likely to grow by 3 pct in 2021: OP Financial Group

The Finnish economy is likely to grow by three percent in 2021, and by 2.6 percent in 2022, predicted OP Financial Group, one of the largest financial companies in Finland, in a press release on Tuesday.

“The economic outlook is basically very clear. There will be stronger recovery as the COVID-19 pandemic wanes as a result of large vaccination coverage,” said Reijo Heiskanen, OP Financial Group’s Chief Economist, in the press release.

“Of course, there is still uncertainty related to the development of the pandemic itself. However, uncertainty concerning the economy will grow only after the boost following the recovery from the COVID-19 crisis is nearly over,” Heiskanen said.

With the vaccination rates increasing, the economies in Finland and abroad will start to recover more strongly. However, the boost brought about by the improvements in the health situation will be rather short-lived, it said.

The service industry in Finland has suffered the most from the COVID-19 pandemic. Compared to service consumption and the export of services, the health situation has not had similar direct consequences to the development of industry and construction. For this reason, service sector development is the key to recovery, it said.

“This year and next year will mark the period for recovering from the COVID-19 crisis. After this — or perhaps already during next year — we will face reality and must adapt to it. One major concern is that export represents too small a share of our national product, which must not be forgotten even during the period of economic recovery,” Heiskanen said.

The second COVID-19 wave may delay recovery, but when recovery accelerates, the employment rate in Finland will increase to 72.6 percent next year, which is slightly above the 2019 level of 72.5 percent, according to OP Financial Group.

In 2022, the unemployment rate in Finland will decrease to 7.2 percent, which is somewhat higher than the 2019 level of 6.7 percent, it said.

As to the global economy, OP Financial Group forecast that it will grow this year by 5.6 percent and by 3.8 percent in 2022.

The industry sector and the global economy have recovered from the COVID-19 crisis faster than the service sector partly thanks to China and other emerging economies, it added.