Bank of Finland Bulletin : Economic outlook

Abstract

Preface. 1

Bank of Finland forecasts 3

Executive summary 4

Recent developments 7 Box 1. National accounts for the third quarter of 2011 10 Box 2. Model for short-term forecasting of GDP 11 Operating environment 14 Non-financial corporations 21 Box 3. Corporate profitability by sector in Finland 24 Households 27 GDP and employment 29 Box 4. Estimating potential output is a challenging task 33 Public finances 36 Box 5. Finland's public finances 39 External balance 44 Wage and price trends 45 Box 6. Structural features and competition in the distributive trades sector: impact on euro area prices 47 Risk assessment 51 Box 7. Alternative scenario: debt crisis escalates into global recession 54 Changes from the previous forecast 58 Financial stability 61

Finnish households' economic margin Petri Mäki-Fränti 75

Analysis of the macroeconomic effects of population ageing using a general equilibrium model Helvi Kinnunen and Jukka Railavo 85

Articles and boxes from previous publications 94

Forecast tables T1