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Minimum wage curbs to hit economic growth: Finnish FinMin

Xinhua, December 23, 2016 Adjust font size:

The Finnish Finance Ministry on Thursday predicted a growth slowdown in 2017 partially due to an agreement on curbing increases in the minimum wage.

It said growth in 2016 would reach 1.6 percent, 0.5 percentage points more than the ministry predicted in September.

The ministry put growth in 2017 at 0.9 percent and in 2018 at 1 percent.

It shared the view expressed by the Bank of Finland that growth would be based on an increase in private consumption. The predicted sluggish growth in 2017 was based on an envisaged decline in domestic demand, caused by modest increase in personal income and parallel acceleration of inflation, said the ministry.

The ministry noted that the concluded deal between many employers and unions to curb pay increases will create increased exports but impair domestic demand next year. But the positive impact on export will be seen with a delay, it added.

Finnish public debt will grow next year from the current 64 percent to 65 percent, and in 2018 to 66 percent, the ministry said. Enditem