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Nordea has lowered its growth outlook for Finland next year, warning that higher energy prices and rising interest rates are beginning to weigh on the recovery that appeared to strengthen earlier this year.
In January, the bank forecast Finnish GDP growth of 1 percent for 2026 and 2 percent for 2027, supported by recovering exports and stronger household consumption. In its updated outlook published yesterday, Nordea kept this year’s growth forecast unchanged at 1 percent but lowered next year’s estimate to 1.5 percent as geopolitical tensions and energy market disruptions cloud the outlook.
The revised forecast comes despite stronger than expected economic data in recent months. Finland’s economy expanded at the end of last year and continued growing during the first quarter as private consumption, industrial production, and investments improved.
“Card data from March and April suggest consumption has remained strong despite rising fuel prices and interest rates,” Nordea Economist Juho Kostiainen said in the bank’s related press release today.
Industry and data centers support growth
Industrial activity has improved steadily since last autumn, particularly in engineering, shipbuilding, and defense industries. Growing order books are expected to support exports and employment during the rest of the year.
“Employment in industry has already turned clearly positive, and the strong development in new orders suggests industrial growth will continue strengthening toward the end of the year,” Kostiainen said.
Construction activity remains divided. Residential construction is still weak because of higher interest rates, oversupply in rental markets, and subdued housing demand. At the same time, data center investments are supporting the broader construction sector.
“Data centers have pushed permits and project starts for other construction segments back into growth,” Kostiainen said.
Nordea said risks surrounding the forecast remain elevated because of geopolitical tensions and uncertainty in energy markets linked to the Middle East crisis.
“If the energy market stabilizes and interest rates begin to fall, economic growth could clearly exceed our forecast,” Kostiainen predicted.
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