Finland expects 1.5% economic growth in 2010

08:17, June 24, 2010      

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Finnish finance ministry said Wednesday the country's economy will grow by 1.5 percent in 2010 and 2.5 percent in 2011 and 2012.

In its latest economic bulletin, the ministry said growth will be fuelled especially by domestic demand and improved exports.

The rate of unemployment is expected to grow to climb to 9.5 percent this year and the employment rate to drop below 68 percent.

Despite economic growth, the deficit in public finances will slide down to 3.2 percent of GDP. The deficit in central government finances will increase to 5.7 percent this year and remain in the red in both 2011 and 2012. The public sector borrowing rate will be in the range of 8 billion Euros over the next two years.

Private investment will continue to decrease this year, but an upswing is anticipated during the next two years. Growth in household income will accelerate this year thanks to higher wage and property incomes.

The ministry predicts acceleration in price inflation to 2.5 percent next year as import and producer prices rise.

Turning to the world economy, Finnish finance ministry notes recovery has been swift from the collapse caused by the financial crisis. It forecasts a fast growth in world trade over the next two years. However, growth in the euro area will be sluggish.



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