HELSINKI, Sept. 5 (Xinhua) -- The Finnish economy continues a healthy growth track this year, but will slow down in the next two years, said Nordea Bank in its Economic Outlook published on Wednesday.
The Finnish economy will grow by 3.0 percent in 2018, driven by consumption, which is fueled by the favorable trend in the labor market and wage developments. However, the growth will slow down to 2.0 percent in 2019 and 1.5 percent in 2020, according to Nordea.
The most significant reason for the slowdown in Finland's economic growth is the gradual cooling of the global economy.
Nordea said growth in the world economy has surpassed its fastest stage, and trade disputes have increased uncertainty. As investment goods account for one fourth of its goods export, the Finnish export sector cannot thrive without a stable global environment for investment.
There are also some domestic reasons for the slowdown. The employment growth is likely to cool as the labor market mismatch takes a negative turn. In addition, wage growth that continues to accelerate added with a strong euro are challenges for Finland's competitiveness in the global market.
Finland's export growth has already slowed significantly in 2018 and Nordea expects growth in export markets to cool further in the coming years.
Nordea's chief economist Aki Kangasharju suggested that tightening the land tax should be considered, as it will neither reduce construction nor aggravate incentive problems in the labor market.
Raising the cost competitiveness and continuing to boost employment are keys to tackle the economic slowdown in Finland in the next few years, noted Kangasharju.
