1. Market Research
Country Report Finland September 2017

Country Report Finland September 2017

  • September 2017
  • ID: 2379053
  • Format: PDF
  • By The Economist Intelligence Unit


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Outlook for 2017-21

  • The Economist Intelligence Unit expects the governing coalition to see out its full term to April 2019. It consists of the Centre Party (KESK), the National Coalition Party (KOK) and Blue Reform, a splinter group from The Finns (PS).
  • After electing a new hardline leader in June, the PS was ejected from the coalition and fragmented into two groups. One group, Blue Reform, provides the KESK and the KOK with a slim parliamentary majority of six seats.
  • Blue Reform is less hardline than the remainder of the PS and should have a more stable relationship with its coalition partners. The challenge for Blue Reform will be to carve out a political position for itself and attract PS voters.
  • For now the PS has been marginalised. However, the government's majority is significantly smaller than before, giving the PS significant leverage on the opposition benches, which will hamper policymaking.
  • A contraction in second-quarter GDP has partially reversed an unusually strong expansion in the first quarter. We maintain our forecast for full-year growth of 2.1% in 2017 and expect it to ease to 1.6% on average in 2018-21.
  • The contribution to growth from domestic demand will decline in 2018-21, but the drag from the external sector should also diminish slightly.
  • We expect EU-Russia sanctions to remain in place throughout the forecast period (2017-21). However, a recent resurgence in trade relations and tourist flows with Russia is likely to help to support economic growth in Finland.
  • We expect the budget deficit to narrow over the forecast period, having shrunk to 1.9% in 2016, from more than 3% in 2014. We forecast that public debt will peak at 66% in 2020, before falling back.


  • A knife attack carried out on August 18th in Turku, in south-west Finland, killed two and injured eight. The perpetrator, a Moroccan man whose asylum request in Finland had been rejected, denied terrorist intent.
  • In response to the attack, security was tightened and the interior minister said that ways to expedite the deportation of asylum-seekers would be explored.
  • In August the Standard Eurobarometer 87 report showed that Finns were strongly in favour of Europe and held a more positive view of the domestic economic outlook compared with the previous report, from November 2016.
  • In July EU harmonised consumer price inflation slowed to 0.6%, from 0.8% in June-its lowest since October 2016.
  • Between June and July Finland's seasonally adjusted EU harmonised unemployment rate edged up by 0.1 percentage points, to 8.8%.

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