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Roundup: Optimism about economic growth takes hold in Finland

Xinhua, May 5, 2017 Adjust font size:

Finland has seen a flurry of optimistic predictions about its economic performance within a week.

The Confederation of Industries reported Wednesday improved prospects in all of its main branches. Local media also highlighted the hot housing market in southwestern Finland as both the auto industry and shipbuilding are recruiting.

Finance Minister Petteri Orpo told lawmakers on Wednesday that Finland was "permanently on a growth path".

Expert estimates about growth this year have varied from the prediction of 1.2 percent of GDP made by the Ministry of Finance to 2 percent predicted by a major insurance company.

Opposition MPs in parliament said, however, the government cannot take credit from the growth.

Lu Anderson, chairman of the Left League, said on Wednesday the turn is a positive change, but it would have come automatically at some stage. She also said the predictions by the Ministry of Finance for later years still hover at around 1 percent.

The Confederation of Industries reported on Wednesday that new orders received by the industries grew remarkably during the first quarter this year. The use of industrial capacity in Finland is now close to the long term average.

In April, 74 percent of capacity was in use, the Confederation said. Most companies reported to the Confederation they had no problems getting financing.

The Finnish technology industries reported on Tuesday that orders in the sector during January-March were 13 percent higher than a year ago. At the end of March, technology sector employed 288,000 people in Finland. During the first quarter this year, 11,000 people were recruited, while the number for the whole 2016 was 28,500 only.

Ilmarinen, a key insurance group, predicted on Tuesday 2 percent growth this year and next. Ilmarinen saw increased domestic demand as the main reason, but detected improvement in exports as well. It said that prospects are improving in all of Finland's market areas and also Russian economy is expected to turn into an upswing.

The predictions by Ilmarinen outnumbered the 1.2 percent growth suggested by the researchers of the Ministry of Finance last week. Late last year, the prediction by the Ministry for 2017 was at 0.9 percent.

However, the Ministry predicted that growth will level off at 1 percent in 2018 and increase to 1.2 percent in 2019. Mikko Spolander, a senior director at the Ministry of Finance, told local media that Finns should get "used to a situation that during the boom cycle growth will remain at around 2 percent".

The Ministry's economists believed that the government budget would show a clear deficit even in 2021. It said the key aim of the government to raise employment rate to 72 percent "remains at a far distance". The Ministry predicted a 70 percent employment rate in 2019.

Finance Minister Petteri Orpo said on Wednesday, however, the government still aims at reaching 72 percent employment. Orpo noted that in the rest of the Nordic area the employment level is 75 percent. Endit