Banks forecast further decline in economic growth

Leading Finnish banks have downgraded their growth prospects for the near future, with the Nordea Bank the latest one predicting a slowdown in growth.

Nordea Bank on Monday gave the likely growth this year at 1.5 percent and 1 percent for 2020, 0.5 percentage point less than what they predicted for both last autumn.

Referring to uncertainties in world trade, Nordea said the investments and exports have ceased to increase in Finland, and the economic growth depends on enhanced employment level, higher household incomes and low inflation.

The OP Group on Friday rolled out the same trend. It gave growth forecasts 1.6 percent for 2019 and 0.8 percent for 2020. In the autumn, OP forecast the growth for 2019 at 1.8 percent.

OP said that deliveries of ships keep the exports at a moderate level this year, but export growth in 2020 will be minute. The world trade would grow in 2020 by 0.5 percent, while in 2019 it is at 2 percent.

Aki Kangasharju, the chief economist of Nordea, told national broadcaster Yle on Monday that Finland needs a "restoration of confidence about the future" and more investments.

He noted that both the spending on research and development and investments on equipment and machinery have been declining, in ratio to the size of the economy.