Exports collapse, higher energy prices impact negatively on growth

The war in Ukraine and new COVID-related shutdowns in China have dramatically worsened the outlook for the world economy this year, said Nordea in a press release on Wednesday.

In Finland, the collapse of exports to Russia, higher energy prices and shortages in materials will have a negative impact on growth.

Yet export prices of raw materials and commodities produced in Finland have shot up, keeping Finland’s terms of trade unchanged.

Savings accumulated by households will help sustain private consumption despite a fall in real incomes.

Nordea has downgraded the growth estimate for the world economy this year from 4.1% in January to now 3.3%. In 2023.

It also forecast a further slowdown in global growth to 3.2%. Geopolitics, high inflation and new resistant COVID-19 variants pose the greatest risks to growth prospects, said Helge Pedersen, Nordea Group Chief Economist.

The Nordic economies will also be affected by the war in Ukraine. However, they all benefit from having had a strong starting point before the war, when the risk of overheating was the common Nordic economic narrative. Finland will be affected the most, Norway the least.