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Danske Bank: Brexit could erase a third of Finland's growth this year

A fresh analysis by Danske Bank says that a quick exit from the European Union by the UK would reduce projected growth in the Finnish economy this year by 0.4 percentage points.

Vuosaren satama.
Image: Jyrki Lyytikkä / Yle

According to Danske Bank, an exit from the European Union by the UK would slow this year's projected economic growth in Finland to 0.8 percent. Two weeks ago, the bank issued a cyclical survey forecasting that Finland's economy would expand by 1.2 percent in 2017.

The impact of Brexit on Finnish growth next year could be a fall from a projected 1.3 percent to 0.5 percent, says Danske Bank.

Both estimates are based on the assumption that the UK will implement a speedy timetable for its break with the EU.

Danske Bank believes that the Finnish economy would be most affected by stagnation in the eurozone, where growth could slow to 0.7 percent next year, while a fall in exports to the UK would have a more limited impact. About one-fifth of Finland's exports are to the UK market.

In its survey released on Thursday, Danske Bank does not expect the British withdrawal to have a significant effect on the level of unemployment, but says that it is likely to boost growth in the nation's public debt.