War in Ukraine and the sanctions that followed it have the most impact on the economy of Finland among the countries of the northern region, follows from Danske Bank’s assessment.
“Danske Bank cut its growth forecasts for Finland and Sweden from its previous report at the beginning of the year. Finland is projected to grow by 1.7% instead of 2.8%, and in Sweden – by 2.5% instead of 3%. The bank maintains its growth forecast for Norway (3.8%) and raises its forecast for Denmark by one percentage point to 3.5%.
Finland has lost an important trading partner, Russia, due to sanctions.
“Finland has lost a fairly important trading partner, while the other Scandinavian countries had virtually no direct trade with Russia before the war,” Las Olsen, chief economist at Danske Bank, was quoted in the message.
It is noted that Russia was Finland’s fifth largest trading partner in terms of exports in 2021, and the role of Russia in imports was more significant, especially in relation to oil and natural gas.
Economic ties between the two countries were also strong in other respects as many companies had production in Russia and Russian tourists were the main source of income for the Finnish tourism industry before the coronavirus.
Danske Bank forecasts inflation in Finland at 4.4%, compared to 4% in Sweden, 4.5% in Denmark and 3.3% in Norway.