OP forecasts 2% growth of Finnish economy for this year, next year

The Finnish economy is expected to grow by 2% this year and next year, according to a forecast published by OP Financial Group on Wednesday.

Finland's growth will be driven by higher exports and investments, in particular, said OP in a press release.

In Q2 2026, Finland's economy grew by 1.4% year on year and indicators suggest that it surged to over 2% in the third quarter. Although the key drivers are exports and investments, private consumption has also begun to recover.

"There's been both good and bad news on the economy since the summer. Oil prices and interest rates are higher. However, GDP growth has picked up, macro indicators are strong and new investment projects are brightening the outlook for the coming years," said Reijo Heiskanen, Chief Economist of OP Pohjola.

Although the GDP growth forecast has not changed, the factors behind it exports and investment prospects have improved, consumption is slightly down, and the growth estimate for imports has risen.

Exports have been growing strongly over the last few years. Looking ahead, they will be supported by favourable demand and Finland's good cost competitiveness. Accordingly, by 2028 the ratio of exports to GDP is expected to reach its highest level in five decades.

Investments are growing strongly, partly due to public procurements and data centre projects. Other investments are also recovering, although the relative slump in residential construction persists. In the coming years, the ratio of investments to GDP looks set to reach its highest level in over three decades.

"Being highly import-intensive, investments are not boosting GDP growth to the extent we might expect, but are pushing the current account into deficit. However, because they are also strengthening Finland's production potential and its basis for long-term growth, the temporary deficit is mainly good news," said Heiskanen.

Private consumption has begun to recover and will become an even stronger growth driver in 2027. This year, consumption is largely supported by a declining savings rate, whereas next year it will mainly be spurred by growth in real income. However, the savings rate is expected to remain relatively high, partly due to higher interest rates.

Inflation is moderating as energy prices fall in line with market expectations. In Finland, core inflation has remained low and consumer prices have risen more slowly than the euro area average.

The labour market has begun a gradual recovery. Employment will grow at a healthy pace in 2027. Although it will start to fall, unemployment will remain relatively high due to the larger number of labour market participants.