OP forecasts 2.3% GDP growth in 2017

As economic outlook keeps improving in Finland, a frontline has emerged about income distribution.

The OP Group on Friday upgraded its estimate of growth in Finland. It now saw growth of GDP in 2017 to be 2.3 percent. Its previous prediction was 1.8 percent. OP predicted the 2-percent-growth level to continue also in 2018.

Reijo Heiskanen, chief economist of the OP Group, said all contributing factors have developed positively. OP underlined that the increasing exports were the main reason for the optimism. The volume of exports grew 10 percent during the first quarter.

Advance statistics indicated that Finnish GDP grew during the first quarter of this year 2.8 percent compared with Q1 in 2016.

Finance Minister Petteri Orpo said on Friday pay increases should remain "close to zero level." He underlined that larger pay hikes would be acceptable only when the "growth is stable."

Riku Aalto, chairman of the newly formed major industrial workers' union, dismissed any zero level approach. Aalto said the demand for pay increase is based on the newly found success of the enterprises and the positive productivity.

Previously the chairman of the Metal Workers, Aalto now heads a new union that covers all industries. He said the unions would not accept the close-to-zero increase of payment as in recent years.

Tariff talks in Finland this autumn will be tougher than before, as the central organization of employers announced earlier it would no longer act as a negotiator. Now the workers' unions in various sectors will negotiate with their own employers' organizations.