Nordea forecasts early recovery of Finnish economy despite tariffs

After a year of near-zero growth, Finland's economy is showing early signs of recovery, Nordea Bank said in a press release on Wednesday, citing its latest growth outlook, reported Xinhua.

Nordea expects Finland's gross domestic product (GDP) to expand by 1 percent in 2026, with growth accelerating to 2 percent in 2027, supported by stronger exports, a gradual rebound in private consumption, and a broadly supportive global backdrop despite rising trade-policy uncertainty.

"We expect private consumption to turn to growth this year, as consumers' purchasing power and the general financial situation of households continue to strengthen," said Juho Kostiainen, an economist of Nordea Bank. He added that this improvement is likely to prompt a cautious decline in the household savings rate, helping lift overall growth to around 1 percent.

Beyond consumption, Nordea said the upturn should also be underpinned by recovering exports and rising productive investment.

The bank noted mixed signals in the labour market. While the unemployment rate has risen to 10.6 percent, among the highest in Europe, the decline in the employment rate has meanwhile eased.

Nordea expects exports to continue growing this year, supported by global demand and large-scale defence investment across Europe.

It, however, cautioned that potential additional tariffs threatened by U.S. President Donald Trump against European countries could weigh on Finland's export outlook.

Despite persistent geopolitical risks, Nordea said global growth conditions in 2026 remain relatively supportive, aided by looser fiscal policy in many countries, accommodative financial conditions, and rapid technological progress.

"Technology in China is making huge leaps forward. We expect the euro area to also benefit from the new technology, albeit with a delay," said Nordea's chief economist Tuuli Koivu.

Koivu added that geopolitical uncertainty continues to erode confidence, citing that Trump's actions "not only cause continued uncertainty, especially in international trade, but also weaken consumer and business confidence in the future."