Economic Survey Spring 2024 Economics department 25.4.2023 1 Key forecast figures 2 2 Other key forecast figures 3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Thank you Mikko spolander, Director general firstname.lastname@gov.fi vm.fi | @VMuutiset Media and Communications Unit viestinta.vm@gov.fi Media Service (Mon-Fri; 9am - 4pm EET): Tel. +358 2955 30500 43 image3.png image4.svg .MsftOfcThm_Text1_Fill_v2 { fill:#FFFFFF; } image19.emf 2022 2021 2022 2023 2024** 2025** 2026** EUR bn GDP at market prices 268 2.8 1.3 -1.0 0.0 1.6 1.5 Imports 128 6.1 8.4 -7.1 0.8 4.1 2.8 Total supply 396 3.7 3.3 -3.0 0.2 2.3 1.9 Exports 122 6.2 3.6 -1.7 0.0 3.6 3.1 Consumption 203 3.5 0.9 1.7 0.4 0.8 1.0 private 139 3.2 1.8 0.4 0.6 1.6 1.5 public 64 3.9 -1.0 4.5 0.0 -0.9 0.1 Investment 65 1.0 2.5 -4.2 0.0 5.4 2.6 private 53 4.2 2.7 -4.1 -2.0 3.8 3.7 public 11 -11.7 1.3 -4.3 9.5 12.3 -1.4 Total demand 396 3.7 3.3 -2.6 0.2 2.3 1.9 domestic demand 275 2.8 3.1 -3.0 0.3 1.9 1.4 change in volume, % image20.emf 2021 2022 2023 2024** 2025** 2026** GDP, EUR bn 251 268 278 282 292 304 Services, change in volume, % 4.2 3.1 0.6 1.2 1.2 0.9 Industry, change in volume, % 0.1 -1.7 -1.0 -1.6 3.0 2.7 Labour productivity, change, % 0.9 -0.6 0.2 1.6 1.4 0.6 Employed labour force, change, % 2.4 2.5 0.3 -0.5 0.6 1.1 Employment rate (15–64 yrs), % 72.3 73.8 73.6 73.2 73.6 74.5 Employment rate (20–64 yrs), % 76.6 78.1 77.9 77.5 78.1 79.1 Unemployment rate, % 7.7 6.8 7.2 7.4 7.2 6.7 Consumer price index, change, % 2.2 7.1 6.2 1.9 1.3 1.4 Index of wage and salary earnings, change, % 2.4 2.4 4.2 3.5 3.3 3.1 Current account, EUR bn 1.0 -6.5 -4.0 -2.4 -3.0 -2.7 Current account, relative to GDP, % 0.4 -2.4 -1.4 -0.9 -1.0 -0.9 Short-term interest rates (3-month Euribor) , % -0.5 0.3 3.4 3.6 2.7 2.2 Long-term interest rates (10-year govt. bonds) , % -0.1 1.7 3.0 2.8 2.7 2.7 General government expenditure, relative to GDP, % 55.8 53.6 55.6 56.5 56.1 55.3 Tax ratio, relative to GDP, % 43.1 43.0 41.9 41.2 41.6 41.7 General government net lending, relative to GDP, % -2.8 -0.5 -2.5 -3.5 -2.8 -2.2 Central government net lending, relative to GDP, % -3.3 -1.6 -3.0 -3.2 -3.2 -2.7 General government gross debt, relative to GDP, % 72.6 73.5 75.8 80.9 82.8 83.4 Central government debt, relative to GDP, % 51.4 52.9 56.3 59.9 61.4 61.8 image9.png image10.svg image21.emf -6 -4 -2 0 2 4 6 2005 2010 2015 2020 2025 Current account Balance of goods and services Sources: Statistics Finland, MoF Current account relative to GDP, % image22.emf -20 -15 -10 -5 0 5 10 2005 2010 2015 2020 Consumer confidence indicator Own economy now Own economy in 12 months’ time Sources: Statistics Finland Consumer confidence deviation from average image23.emf 0 20 40 60 80 100 120 140 -2 0 2 4 6 8 2005 2010 2015 2020 2025 Saving ratio (left scale) Debt ratio (right scale) Household savings and debt Sources: Statistics Finland, MoF % of disposable income image24.emf 0 5 10 15 20 25 30 1990 1995 2000 2005 2010 2015 2020 2025 Construction Machinery and equipment R & D Investments relative to GDP, % Sources: Statistics Finland, MoF image25.emf -15 -10 -5 0 5 10 15 2005 2010 2015 2020 2025 Construction Machinery and equipment R & D Total Investments Sources: Statistics Finland, MoF change in volume and growth impact, % -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 2020 2021 2022 2023 2024 2025 2026 Households' real disposable income change and contributions to growth, % Compensation of employees per work hour Hours worked Social benefits received Current taxes and net social contributions paid Mixed and property income, net Price index of private consumption Households' real disposable income Sources: Statistics Finland, MoF image26.emf image27.emf -6 -4 -2 0 2 4 6 2005 2010 2015 2020 2025 Durable goods Semi-durable goods Non-durable goods Services Tourism expenditure, net Total Household consumption Sources: Statistics Finland, MoF change in volume and contributions to growth, % image28.emf 50 100 150 200 250 1990 1995 2000 2005 2010 2015 2020 2025 Manufacturing Services Primary production Construction Output Sources: Statistics Finland, MoF 1990 = 100 image29.emf -3 -2 -1 0 1 2 3 4 5 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Total factor productivity Capital Labour Potential output growth Contributions to potential output growth Sources: Statistics Finland, MoF according to EU method, % image30.emf -5 -4 -3 -2 -1 0 1 2 3 4 5 2010 2015 2020 2025 Net exports Investment Private consumption Public consumption Change in inventories GDP Finnish GDP and demand items %, annual change and contribution Sources: Statistics Finland, MoF image31.emf -10 -8 -6 -4 -2 0 2 4 6 8 2005 2010 2015 2020 2025 Services Secondary production Primary production Total value added, change in volume Contribution to total output Sources: Statistics Finland, MoF percentage points -5 -4 -3 -2 -1 0 1 2 3 4 5 -5 -4 -3 -2 -1 0 1 2 3 4 5 2010 2012 2014 2016 2018 2020 2022 2024 Gross domestic product, growth % Source: Statistics Finland, MoF image32.emf image33.emf -40 -20 0 20 40 60 80 2005 2010 2015 2020 Residential buildings Other than residential buildings Source: Statistics Finland Construction volume index change yoy, % image34.emf -30 -20 -10 0 10 20 -60 -40 -20 0 20 40 2005 2010 2015 2020 Confidence indicator for construction (left scale) Value added in construction, volume (right scale) Construction confidence and output Sources: Statistics Finland, European Commission seasonally adjusted balance and change yoy, % image35.emf 60 70 80 90 100 110 120 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Electrical and electronics industry Metal industry excl. electrical and electronics industry Chemical industry Forest industry Source: Statistics Finland Volume index for industrial production 2021 = 100, trend image36.emf -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 -50 -40 -30 -20 -10 0 10 20 30 40 50 2005 2010 2015 2020 Services confidence (left scale) Trend indicator of output, services (right scale) Sources: Statistics Finland, European Commission Service confidence and output change yoy, per cent and balance, 3-month image37.emf -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 2005 2010 2015 2020 2025 China Euro area United States Gross domestic product Sources: Statistical authorities, MoF change in volume, % image38.emf 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Trade Manufacturing Construction Services Turnover trends in main industries Sources: Statistics Finland 2021 = 100, seasonally adjusted image39.emf 55 60 65 70 75 80 0 4 8 12 16 20 1990 1995 2000 2005 2010 2015 2020 2025 Unemployment rate (left scale) Employment rate 15-64 yrs (right scale) Employment rate, 20-64 yrs (right scale) Employment and unemployment Sources: Statistics Finland, MoF % Unemployment rate = Unemployed / Labour force (15–74 yrs) Employment rate = Employed / Population of working age image40.emf 96 100 104 108 112 116 120 124 128 132 136 140 144 148 2010 2015 2020 2025 Finland Sweden¹ Germany¹ Euro area¹ Unit labour costs Sources: European Commission, Statistics Finland, MoF 2010 = 100, nominal ¹ European Commission forecast image41.emf 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 110 000 120 000 1990 1995 2000 2005 2010 2015 2020 Vacancies Source: MEAE seasonally adjusted image42.emf -24 -20 -16 -12 -8 -4 0 4 8 12 16 2005 2010 2015 2020 2025 World trade Finnish exports World trade Sources: CPB Netherlands Bureau for Economic Policy Analysis, Statistics Finland, MoF change in volume, % image43.emf -2 -1 0 1 2 3 4 5 6 7 8 9 10 2017 2018 2019 2020 2021 2022 2023 2024 Food Energy Goods Owner-occupied housing Services Consumer price index percentage change and contribution to change Sources: Statistics Finland Consumer price index image44.emf -1 0 1 2 3 4 5 6 7 8 2005 2010 2015 2020 2025 Consumer price index Index of wage and salary earnings Inflation and wages Sources: Statistics Finland, MoF change yoy, % image45.emf 25 45 65 85 105 125 145 165 185 0 20 40 60 80 100 120 140 160 180 200 220 240 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 USD/barrel €/MWh Natural gas, near futures, euro area (left scale) Crude oil (Brent, global spot price, right scale) Sources: Intercontinental Exchange (ICE), Macrobond Raw material prices image46.emf -1 0 1 2 3 4 5 6 7 8 2005 2010 2015 2020 2025 Consumer price index Harmonised index of consumer prices Core inflation Consumer price indices Sources: Statistics Finland, MoF change yoy, % image47.emf 0 10 20 30 40 50 60 70 80 90 100 110 120 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 1990 1995 2000 2005 2010 2015 2020 2025 EUR bn (left scale) Relative to GDP, % (right scale) General government debt Sources: Statistics Finland, MoF image48.emf -6 -4 -2 0 2 4 6 2005 2010 2015 2020 2025 Total Central govt. Municipal govt.* Social security funds Wellbeing services counties General government financial balance Sources: Statistics Finland, MoF relative to GDP, % * Incl. wellbeing services county administration until the end of year 2022 image49.emf 35 40 45 50 55 60 65 70 1990 1995 2000 2005 2010 2015 2020 2025 Revenue Expenditure Tax revenue General government revenue, tax revenue and expenditure Sources: Statistics Finland, MoF relative to GDP, % image50.emf 0 10 20 30 40 50 60 70 80 90 2005 2010 2015 2020 2025 General govt. gross debt Central govt. debt relative to GDP, % General government debt Sources: Statistics Finland, MoF image51.emf -6 -4 -2 0 2 4 6 2005 2010 2015 2020 2025 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 image52.emf -2 -1 0 1 2 3 2030 2035 2040 2045 2050 2055 2060 2065 2070 Pensions Health care Long-term care Education Unemployment Total The figure is compiled using the model developed by the Ministry of Social Affairs and Health for Change in age-related expenditure Source: MoF from year 2028, relative to GDP, % image53.emf -1 0 1 2 3 4 5 2005 2010 2015 2020 2025 Other social security funds Earnings-related pension schemes Total social security funds Social security funds, financial balance Sources: Statistics Finland, MoF relative to GDP, % 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 Dependency ratio (aged 0 to 14 and over 65 years) Old-age dependency ratio (aged 65 and over) Dependency ratio persons per hundred persons of working age Sources: Statistics Finland, MoF 616 HuoltosuhdeSuhdelukuE image54.emf image55.emf -14 -12 -10 -8 -6 -4 -2 0 2 4 2005 2010 2015 2020 2025 EUR bn Relative to GDP, % Central government financial balance Sources: Statistics Finland, MoF image56.emf 0 10 20 30 40 50 60 70 80 90 100 110 1990 1995 2000 2005 2010 2015 2020 2025 Revenue Expenditure Central government revenue and expenditure Sources: Statistics Finland, MoF EUR bn image57.emf 0 5 10 15 20 0 5 10 15 20 25 30 35 40 45 1990 1995 2000 2005 2010 2015 2020 2025 EUR bn (left scale) Relative to GDP, % (right scale) Municipal government debt Sources: Statistics Finland, MoF Incl. wellbeing services county administration until the end of year 2022 image58.emf -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 2005 2010 2015 2020 2025 Municipal government financial balance Sources: Statistics Finland, MoF relative to GDP, % Incl. wellbeing services county administration until the end of year 2022 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 10 0+ Health care Long-term care Education Unemployment Pensions Age-related expenditure by age category in 2022 EUR per capita, average Sources: SOME model developed by the Ministry of Social Affairs and Health, MoF IkasidMenotEuroPerHloE image59.emf image14.png image15.svg image1.png image2.svg