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Finland Country Risk Report Q2 2019

Finland Country Risk Report Q2 2019

Key View:

GDP growth will ease over the coming years in line with a regional slowdown and structural constraints. Domestic demand will fail to return growth to pre-crisis levels, while there will be headwinds from pre-election political uncertainty and threats to global trade from increase 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 faces more delays, reducing the likelihood that the package will be approved before the election due by Spring 2019.

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.

The next government may struggle to agree on a reform path and could lead to policy uncertainty.Finland Country Risk


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Finland's Households Unlikely To Provide Growth Boost
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
Sluggish Eurozone Inflation Suggests Slower Pace Of Hikes On The Cards
Structural Fiscal Position
TABLE: MAIN EXPENDITURE AND REVENUE CATEGORIES, 2015
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Gradual Strengthening Lies Ahead In 2019
TABLE: EUROZONE CURRENCY FORECAST
Political Outlook
Domestic Politics I
No Clear Favourite Ahead Of 2019 Finnish Elections
Finland Country Risk Q2 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 is solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsDomestic Politics II
Eurozone Reforms: Large Questions Remain Unanswered
Long-Term Political Outlook
Structural Reforms Key Challenge
Global Macro Outlook
Volatility Feeding Into Slower Growth
TABLE: GLOBAL ASSUMPTIONS
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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