The Bank of Finland (BoF) on Friday said it did not expect the country's GDP to grow in the final quarter as the economic outlook had weakened after a short summer reprieve.
Corporate and consumer confidence had levelled off over the past months, contributing to a weakened economic outlook, according to the central bank.
"Poor confidence in the entire economy will in itself contribute to further weakening future economic growth," the BoF said in its November bulletin.
Second wave wallops service sector
Following the summer’s economic rebound, the economy showed signs of bouncing back at the end of the year, with the BoF reporting 3.4-percent GDP growth in Q3 over the previous quarter. But the central bank said the second wave of the pandemic had continued to batter the service sector in Finland, as elsewhere in Europe.
A growing number of infections and restrictions in the fourth quarter are expected to particularly target service sectors in the eurozone, including Finland, the BoF said.
It cited Google movement data showing that people in Finland were increasingly staying away from shops, leisure venues and public transport stations this autumn.
The central bank, however, noted that retail trade was a bright spot in the economy, exhibiting strong growth this year, while the pandemic’s blow to the industrial sector was having a smaller-than-expected impact.