Finnish economy in hibernation : Interim forecast March 2023

Abstract

The Finnish economy slipped into recession last autumn as a result of the energy crisis brought on by Russia’s war in Ukraine. The economy's weak performance will continue this year, as it takes time for the effects of high inflation and the rise in interest rates to be felt in full. However, the recession is likely to be short-lived and the employment rate will remain high throughout the downturn. Energy prices have fallen sharply in recent months and the immediate threat posed by the energy crisis has abated. The upward pressure on consumer prices will gradually subside and inflation will slow down substantially by next year. However, there is still high uncertainty about the path the global economy will take and the impact of this on Finland.