Economic Survey Spring 2020 16.4.2020 Economics Department 16.4.2020 Economics Department 2 Key forecast figures 16.4.2020 Economics Department 3 Other key forecast figures 16.4.2020 Economics Department 4 16.4.2020 Economics Department 5 16.4.2020 Economics Department 6 16.4.2020 Economics Department 7 16.4.2020 Economics Department 8 16.4.2020 Economics Department 9 16.4.2020 Economics Department 10 16.4.2020 Economics Department 11 16.4.2020 Economics Department 12 16.4.2020 Economics Department 13 16.4.2020 Economics Department 14 16.4.2020 Economics Department 15 16.4.2020 Economics Department 16 16.4.2020 Economics Department 17 16.4.2020 Economics Department 18 16.4.2020 Economics Department 19 16.4.2020 Economics Department 20 16.4.2020 Economics Department 21 16.4.2020 Economics Department 22 16.4.2020 Economics Department 23 16.4.2020 Economics Department 24 16.4.2020 Economics Department 25 16.4.2020 Economics Department 26 16.4.2020 Economics Department 27 16.4.2020 Economics Department 28 16.4.2020 Economics Department 29 16.4.2020 Economics Department 30 16.4.2020 Economics Department 31 16.4.2020 Economics Department 32 16.4.2020 Economics Department 33 16.4.2020 Economics Department 34 16.4.2020 Economics Department 35 16.4.2020 Economics Department 36 16.4.2020 Economics Department 37 16.4.2020 Economics Department 38 16.4.2020 Economics Department 39 16.4.2020 Economics Department 40 Mikko Spolander Director general Tel. +358 2955 30006 www.vm.fi Media and Communications Unit vm-viestinta@vm.fi Media Service (during office hours; 8am - 4pm EET): Tel. +358 2955 30500 image2.jpg image10.emf 2019 2017 2018 2019 2020** 2021** 2022** EUR bn GDP at market prices 240 3.1 1.6 1.0 -5.5 1.3 1.3 Imports 95 4.1 5.5 2.2 -3.7 3.0 2.2 Total supply 335 3.4 2.7 1.3 -5.0 1.8 1.5 Exports 96 8.8 1.7 7.2 -6.2 3.2 2.1 Consumption 182 0.6 1.9 0.9 -1.3 1.3 1.2 private 126 1.0 1.8 1.0 -4.0 2.7 1.6 public 55 -0.2 2.1 0.9 4.9 -1.6 0.4 Investment 57 4.0 3.7 -0.8 -7.1 -1.2 1.6 private 47 4.8 3.5 -1.0 -10.0 -1.5 2.7 public 10 0.2 5.0 0.3 6.4 -0.2 -2.7 Total demand 335 3.4 2.6 1.8 -4.8 2.0 1.8 domestic demand 239 1.5 2.9 -0.3 -4.2 1.6 1.6 change in volume, % image11.emf 2017 2018 2019 2020** 2021** 2022** GDP, EUR bn 226 234 240 229 237 244 Services, change in volume, % 2.5 2.5 1.5 -5.3 1.4 1.3 Industry, change in volume, % 8.4 -1.6 1.0 -6.0 2.0 1.8 Labour productivity, change, % 2.9 -0.8 0.3 -1.6 1.5 1.0 Employed labour force, change, % 1.1 2.6 1.1 -2.0 -0.1 0.4 Employment rate, % 69.6 71.7 72.5 71.2 71.3 71.7 Unemployment rate, % 8.6 7.4 6.7 8.0 8.1 7.9 Consumer price index, change, % 0.7 1.1 1.0 0.7 1.3 1.5 Index of wage and salary earnings, change, % 0.2 1.7 2.4 1.9 2.5 2.3 Current account, EUR bn -1.7 -3.2 -0.2 -3.1 -3.3 -3.3 Current account, relative to GDP, % -0.8 -1.4 -0.1 -1.4 -1.4 -1.3 Short-term interest rates (3-month Euribor) , % -0.3 -0.3 -0.4 -0.4 -0.3 -0.1 Long-term interest rates (10-year govt. bonds) , % 0.5 0.7 0.1 0.1 0.3 0.6 General government expenditure, relative to GDP, % 53.8 53.4 53.3 59.8 57.9 57.2 Tax ratio, relative to GDP, % 42.9 42.4 42.1 42.1 43.6 42.8 General government net lending, relative to GDP, % -0.7 -0.9 -1.1 -7.2 -4.0 -4.1 Central government net lending, relative to GDP, % -1.8 -1.2 -1.2 -5.5 -2.7 -3.0 General government gross debt, relative to GDP, % 61.3 59.6 59.4 69.1 71.5 73.8 Central government debt, relative to GDP, % 46.8 44.9 44.3 51.9 53.2 54.5 image12.emf -4 -2 0 2 4 6 8 10 -4 -2 0 2 4 6 8 10 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Current account Balance of goods and services Sources: Statistics Finland, MoF Current account relative to GDP, % VM34170 image13.emf -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 Households and non-profit institutions General government Financial and insurance corporations Non-financial corporations and housing corporations¹ Total economy Net lending by sector relative to GDP, % Sources: Statistics Finland, MoF 1) Including financial sector in 2020-2022 VM34170 image14.emf -6 -4 -2 0 2 4 6 8 10 -6 -4 -2 0 2 4 6 8 10 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Wages Social transfers Other income, net Property income, net Taxes Social contributions Disposable income Sources: Statistics Finland, MoF Household disposable income change and growth impact, % VM34170 image15.emf -40 -30 -20 -10 0 10 20 30 -40 -30 -20 -10 0 10 20 30 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Industry Consumers Long-term average (industry) Long-term average (consumers) Source: European Commission Industry and consumer confidence balance, seasonally adjusted VM34170 image16.emf 40 60 80 100 120 140 -4 0 4 8 12 16 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 Saving ratio (left scale) Debt ratio (right scale) Household savings and debt Sources: Statistics Finland, MoF % of disposable income VM34170 image17.emf 0 5 10 15 20 25 30 0 5 10 15 20 25 30 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 Construction Machinery and equipment R & D Investments relative to GDP, % Sources: Statistics Finland, MoF VM34170 image18.emf -15 -10 -5 0 5 10 15 -15 -10 -5 0 5 10 15 95 97 99 01 03 05 07 09 11 13 15 17 19 21 Construction Machinery and equipment R & D Total Investments Sources: Statistics Finland, MoF change in volume and growth impact, % VM34170 image19.emf 60 70 80 90 100 -10 -5 0 5 10 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Investment in machinery and equipment, change in moving annual total, % (left scale) Capacity utilization rate, industry, 6-month moving average, % (right scale) Source: Statistics Finland, Confederation of Finnish Industries Investment and capacity utilization rate VM34170 image20.emf 50 100 150 200 250 50 100 150 200 250 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 Industry Services Primary production Construction Production Sources: Statistics Finland, MoF 1990=100 VM34170 image21.emf -3 -2 -1 0 1 2 3 4 5 -3 -2 -1 0 1 2 3 4 5 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 Total factor productivity Capital Labour Potential output growth Contributions to potential output growth Sources: Statistics Finland, MoF according to EU method, % VM34170 image22.emf -10 -8 -6 -4 -2 0 2 4 6 8 -10 -8 -6 -4 -2 0 2 4 6 8 00 02 04 06 08 10 12 14 16 18 20 22 Primary production Secondary production Services Total value added, change in volume Contribution to total production Sources: Statistics Finland, MoF percentage points VM34170 image23.emf 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 Electrical and electronics industry Chemical industry Rest of manufacturing Metal industry excluding electrical and electronics industry Forest industry Manufacturing Source: Statistics Finland % of gross value added VM34170 image24.emf -30 -20 -10 0 10 20 30 -30 -20 -10 0 10 20 30 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Forest industry Metal industry excl. electrical and electronics industry Electrical and electronics industry Chemical industry Source: Statistics Finland Volume index for industrial production 3-month moving average, change yoy, % VM34170 image25.emf -30 -20 -10 0 10 20 -60 -40 -20 0 20 40 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Confidence indicator for construction (left scale) Value added in construction, volume (right scale) Confidence and production in construction Sources: Statistics Finland, European Commission seasonally adjusted balance and change yoy, % VM34170 image26.emf -6 -4 -2 0 2 4 6 8 -30 -20 -10 0 10 20 30 40 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Services confidence (left scale) Trend indicator of output, services (right scale) Sources: Statistics Finland, European Commission Service production change yoy, per cent and balance, 3-month VM34170 image27.emf -6 -4 -2 0 2 4 6 8 10 12 14 16 -6 -4 -2 0 2 4 6 8 10 12 14 16 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 China (not seasonally adjusted) United States (seasonally adjusted) Euro area (seasonally adjusted) Gross domestic product Sources: Statistical authorities, MoF change in volume, % VM34170 image28.emf 55 60 65 70 75 0 5 10 15 20 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 Unemployment rate (left scale) Employment rate (right scale) Employment Sources: Statistics Finland, MoF % Unemployment rate = Unemployed / Labour force (15–74 yrs) Employment rate = Employed / Population of working age (15–64 yrs) VM34170 image29.emf 2 3 4 5 6 7 8 9 10 11 12 13 2 3 4 5 6 7 8 9 10 11 12 13 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Euro area Finland Sweden Germany United States Sources: Statistical authorities Unemployment rate seasonally adjusted, % VM34170 image30.emf 96 100 104 108 112 116 120 124 128 96 100 104 108 112 116 120 124 128 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Finland Sweden¹ Germany¹ Euro area¹ Unit labour costs Sources: European Commission, Statistics Finland, MoF 2010=100, nominal ¹ European Commission forecast VM34170 image31.emf -24 -20 -16 -12 -8 -4 0 4 8 12 16 01 03 05 07 09 11 13 15 17 19 21 -24 -20 -16 -12 -8 -4 0 4 8 12 16 World trade Finnish exports World trade Sources: CPB Netherlands Bureau for Economic Policy Analysis, Statistics Finland, MoF change in volume, % VM34170 image32.emf -3 -2 -1 0 1 2 3 4 5 6 -3 -2 -1 0 1 2 3 4 5 6 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Food Energy Goods Owner-occupied housing Services Consumer price index percentage change and contribution to change Sources: Statistics Finland, MoF Consumer price index VM34170 image33.emf -1 0 1 2 3 4 5 6 -1 0 1 2 3 4 5 6 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 Consumer price index Index of wage and salary earnings Consumer price index and index of wage and salary earnings Sources: Statistics Finland, MoF change yoy, % VM34170 image34.emf 25 35 45 55 65 75 85 95 105 115 125 135 145 50 60 70 80 90 100 110 120 130 140 150 160 170 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 USD/barrel 2015=100 Industrial raw material index, euro area (left scale) Crude oil (Brent, global spot price, right scale) Sources: Hamburgisches WeltWirtschafts Institut, Macrobond, MoF Raw material prices VM34170 image35.emf 0 10 20 30 40 50 60 70 80 90 100 110 0 20 40 60 80 100 120 140 160 180 200 220 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 EUR bn (left scale) Relative to GDP, % (right scale) General government debt Sources: Statistics Finland, MoF VM34098 image36.emf -8 -6 -4 -2 0 2 4 6 -8 -6 -4 -2 0 2 4 6 02 04 06 08 10 12 14 16 18 20 22 24 Total Central govt. Local govt. Social security funds General government financial balance Sources: Statistics Finland, MoF relative to GDP, % VM34098 image37.emf 35 40 45 50 55 60 65 70 35 40 45 50 55 60 65 70 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 Revenue Expenditure Tax revenue General government revenue, tax revenue and expenditure Sources: Statistics Finland, MoF relative to GDP, % VM34098 image38.emf 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 03 05 07 09 11 13 15 17 19 21 23 General govt. gross debt Central govt. debt relative to GDP, % General government debt Sources: Statistics Finland, MoF VM34098 image39.emf -8 -6 -4 -2 0 2 4 6 -8 -6 -4 -2 0 2 4 6 01 03 05 07 09 11 13 15 17 19 21 23 Structural balance Nominal balance General government nominal and structural balance Sources: Statistics Finland, MoF relative to GDP, % Based on the European Commission's production function approach VM34098 image40.emf 0 5 10 15 20 25 0 5 10 15 20 25 97 99 01 03 05 07 09 11 13 15 17 19 21 23 Earnings-related pensions Basic pensions Health insurance Unemployment Other Benefits, allowances and medical care reimbursements Sources: Statistics Finland, MoF relative to GDP, % VM34098 image41.emf - 14 - 12 - 10 - 8 - 6 - 4 - 2 0 2 4 -14 -12 -10 -8 -6 -4 -2 0 2 4 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 EUR bn Relative to GDP, % Central government financial balance Sources: Statistics Finland, MoF VM34098 image42.emf 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 Revenue Expenditure Central government revenue and expenditure Sources: Statistics Finland, MoF EUR bn VM34098 image43.emf 0 2 4 6 8 10 12 14 16 18 20 22 0 4 8 12 16 20 24 28 32 36 40 44 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 EUR bn (left scale) Relative to GDP, % (right scale) Local government debt Sources: Statistics Finland, MoF VM34098 image44.emf image45.emf 0 15 30 45 60 75 90 105 120 0 30 60 90 120 150 180 210 240 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Others, EUR bn (left scale) Listed shares, EUR bn (left scale) Bonds, EUR bn (left scale) Relative to GDP, % (right scale) Investment portfolio of pension funds all members Sources: The Finnish Pension Alliance TELA, Statistics Finland, MoF VM34098 image46.emf image47.emf image48.emf image1.jpeg