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Fri, 20 Dec, 2013 04:07:06 AM FTimes-Xinhua Report, December 20  File Photo. Photo – Lehtikuva. Finland downgraded its national growth forecast in 2013 as well as the next two years on Thursday, and the country will witness the second year of economic recession.
According to the forecast released by the Finnish Ministry of Finance, the economy will decrease by 1.2 percent this year, and will possibly grow by 0.8 percent in 2014 and 1.8 percent in 2015.
In the previous outlook released in June, the economic growth was put at 0.4 percent this year, 1.2 percent in 2014 and 2 percent in 2015.
"This is the second consecutive year that the economy has gone into negative territory," said Mika Kuismanen, a senior official from the Ministry of Finance.
Euros in Helsinki on 23 September 2013. Photo – Lehtikuva. In addition, the ministry predicted that the unemployment rate of Finland would rise to 8.4 percent from the current level of 7.4 percent.
Public debt will also continue to grow, pushing the debt ratio to exceeding the EU limits of 60 percent of the GDP. It will be the first time that the debt ratio of Finland exceeds the limit regulated by EU after World War II.
Kuismanen pointed out that one of the principal reasons behind the poor economic performance is weak domestic demand with low private investment. Even though Finnish exports have grown, prospects are still gloomy, he added.
The official was not optimistic about the recovery in euro member states, saying "despite the recent encouraging news from the euro area, growth remains fragile."
Two days ago, Dansk Bank Finland also lowered the growth forecast for the Finnish economy in 2014 from 1.5 percent to 1.1 percent.
The Finnish Ministry of Finance releases economic forecasts twice a year, respectively in June and December.
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