HELSINKI, June 10 (Xinhua) -- Finland's economic recovery is expected to remain slow in 2025, as global trade tensions and heightened economic uncertainty continue to weigh on growth, the Bank of Finland said in its latest forecast on Tuesday.
The central bank projected gross domestic product (GDP) growth of 0.5 percent in 2025, rising to 1.5 percent in 2026 and 1.6 percent in 2027. Inflation is expected to stay below 2 percent throughout the forecast horizon.
"Growth in the Finnish economy is picking up little by little, but the recovery will be hindered" by trade tensions and general uncertainty within the global economy, said Juuso Vanhala, head of forecasting at the Bank of Finland.
High tariffs and weakening global demand are likely to restrain exports, although lower interest rates in the euro area may provide some support for investment, the bank noted.
The labour market is likely to rebound modestly. Unemployment is projected to remain high due to subdued demand for labour, reflecting the economy's restrained pace of growth. Consumer price inflation will stay muted, held down by falling energy prices and only moderate increases in product taxes.
Private consumption is forecast to strengthen slowly, supported by improving consumer confidence and rising household purchasing power, as low inflation and reduced interest payments ease the financial burden on households.
Commenting on the economic outlook, Bank of Finland Governor Olli Rehn said that despite ongoing trade tensions, conditions in the euro area remain broadly conducive to growth.
"With the 0.25 percentage point interest rate cut last week, the European Central Bank aimed to ensure that inflation stabilises around the 2 percent target in the long term and that the economy continues to grow," Rehn said. ■