Finland upgrades economic growth forecasts

The Finnish Ministry of Finance on Tuesday upgraded forecasts for the country's economic growth this year and in the next two years.

The Finnish economy will post a growth of 3.1 percent for 2017, and will slow down to 2.4 percent in 2018 and 1.9 percent in 2019, the ministry said in a statement.

In the previous report made in September, the figures were slightly lower, which were 2.9 percent in 2017, 2.1 percent in 2018 and 1.8 percent in 2019.

The ministry believed that in the next a few years the Finnish economic growth will be underpinned by the broad-based growth in the global economy, and will be driven by foreign trade and domestic demand.

"Growth in the global economy is broad-based, and the outlook has improved in the euro area in particular. The acceleration in economic growth has also boosted world trade, which is now growing at a significantly faster pace than global GDP," said the ministry.

The forecast said that in 2018, the growth in private consumption will be driven by higher earnings and a rising employment rate. All types of investment will increase, and the boom in housing construction will not show any sign of deceleration.

However, the slowdown of Finland's GDP in 2019 will be largely attributable to the weaker private consumer demand, as the growth in households' income will slow down as inflation rises.

The ministry warned that the growth in the economy will not correct the imbalance in public finances.

"Even when the economy is at the height of its upswing, revenue will still not be sufficient to cover expenditure. Central government finances in particular will remain substantially in deficit," noted the ministry.