According to the forecast, strong activity in Finland’s construction sector is set to continue, which will underpin investment. Business investment in Finland saw growth of over 5% in the first quarter of this year, suggesting that it has now started to broaden to all sectors after being earlier concentrated in housing and transport equipment. Earnst & Young therefore expects investment in Finland to grow by 7.6% in 2011 and 5% in 2012. Consumer spending is expected to grow by 2% in 2011 and 2.6% in 2012.
A downside risk to the growth forecast stems from the increased turbulences on the European sovereign debt markets that could lead to a restructuring of Greek sovereign debt. Finland’s direct exposure to Greece is negligible, but significant negative impact would come from credit tightening across the Eurozone and dampened external demand as a result of slower growth in other eurozone countries.
Source: Ernst & Young Eurozone Forecast