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Finland Country Risk Report Q1 2019

Finland Country Risk Report Q1 2019

GDP growth will ease over the coming years in line with a regional slowdown and structural constraints Domestic demand will drive the expansion, while there will be headwinds from pre-election political uncertainty and threats to global trade from increased protectionism

Recent above-trend growth has helped correct macroeconomic imbalances, but long-term sustainable growth hinges on the successful completion of reforms to enhance export competitiveness and tackle the problems linked to a rapidly ageing population

The government's flagship reforms to healthcare, social services, and regional governments face more delays, reducing the likelihood that the package will be approved before the election due by spring 2019 The setback could prompt early elections, though the broader impact would be greater uncertainty about the sustainability of public finances Forecast Changes

We have nudged up our short-term growth forecast for 2018 to 2 5%, from 2 3%, due to strong momentum at the start of the year and the announcement of new major investment projects

Key Risks

A faster than expected deceleration in EU growth after Brexit would take a toll on European demand for Finnish exports, while US protectionist measures have increased the risks to global trade

Elevated household debt may prompt monetary authorities to impose new restrictions on bank lending – particularly for mortgages – curbing the growth in credit


Executive Summary
Core Views
Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Finnish Households Hold Key To Stronger Growth Trajectory
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP 5 EXPORT DESTINATIONS AND GOODS EXPORTS (2016)
TABLE: TOP 5 IMPORT SOURCES AND GOODS IMPORTS (2016)
Monetary Policy
ECB Has Few Options But To Gradually Tighten
Structural Fiscal Position
TABLE: MAIN EXPENDITURE AND REVENUE CATEGORIES, 2015
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Gradual Appreciation Amidst End Of QE
TABLE: EUROZONE CURRENCY FORECAST
Finland Country Risk Q1 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsPolitical Outlook
Domestic Politics
Finnish Coalition Disagreements A Sign Of Things To Come
Long-Term Political Outlook
Political Stability To Be Tested By Need For Reform
Global Macro Outlook
Contagion Risks Limited To EMs For Now
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % Y-O-Y
Index Tables
TABLE: FINLAND – MACROECONOMIC DATA AND FORECASTS

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