The forecast is based on expectations of wage restraint, meaning low salary increases or wage freezes, that will support an export-led recovery by keeping down costs to companies. Even then, the growth expected next year is below the long-term trend rate.
OP economists forecast inflation to run at 1.6 percent in 2013 and 1.3 percent in 2014, which they claim will ensure there is not a real-terms fall in wages.
Finland’s unemployment percentage is expected to remain stable at just over 8 percent next year. The bank did sound a warning over Finnish public debt, which is expected to near the EU-mandated limit of 60 percent of GDP in the coming years.
“If positive surprises do not come from the Finnish economy, additional spending cuts will be required in 2015 to meet the criteria set for the public debt/GDP ratio, said OP Pohjola’s Chief Economist, Reijo Heiskanen.