Consumption, employment to spur economic recovery

Nordea Economic Outlook forecasts recovery of the Finnish economy in the current year. The economic growth is to be propelled by private consumption and rising employment, according to a press release from Nordea.

The outlook is also bright in the Nordics over a year into the pandemic, as the vaccine roll-out continues to gain momentum. The countries stand well-equipped, with strong public finances and households in good financial shape. As the pandemic loses its grip and societies gradually reopen, GDP growth is expected to take off, on the back of a surge in private consumption and strong foreign demand,” said Helge Pedersen, Nordea Group Chief Economist.

The Finnish economy will start a tangible recovery during the summer. Private consumption is expected to grow fast, with rising employment and the release of pent-up demand. Recovery in manufacturing has continued this year, and new orders are coming in at such a pace that the growth outlook is excellent.

The Danish economy has weathered the coronavirus crisis well and stands in a strong position for future growth. There is still huge pent-up spending demand among households, and Danish exporters are well positioned to take advantage of rising global growth. Public finances are strong, with Denmark having the lowest public sector deficit for 2020 among EU countries.

The Norwegian economy is at an inflection point. In tandem with vaccines being rolled out, the Norwegian society will gradually reopen. After summer, most things will be back to normal, and the economy will recover fast. Clear signs of normalisation in the economy will pave the way for the first rate hike from Norges Bank in September.

Sweden will experience broad-based and elevated GDP growth. Global demand is rising swiftly, and households have seldom enjoyed such a favourable financial situation as they do now, paving the way for strong growth in domestic demand. Riksbanken is expected to stay on hold with the repo rate at zero, and the QE programme will run as planned.

According to the outlook, the world is currently experiencing its strongest recovery in almost 50 years. Pedersen expects global growth to land as high as 5.8% this year, before slowing to 4.5% next year.