Finland Times

     After two years of negative growth, Etla estimated that Finland's gross domestic product (GDP) is expected to decline by 0.4 percent.

     According to Statistic Finland, the output of the Finnish national economy contracted by 0.8 percent in July this year from the previous year, while the industrial output was 2.6 percent lower than a year ago.

     Reasons for the deterioration of the Finnish economy are multifarious, said Etla, adding that the main reason is the Finnish exports did not return to growth as expected, and exports to Russia in particular have decreased considerably.

     In addition, the stagnancy of the Finnish economy could also be attributed to the slow growth in the euro area and the downturn of the Russian economy caused by the Ukraine crisis.

     The thinktank warned that if the Ukraine crisis prolongs, the economic sanctions would bring the economic activities into even worse situation for several years in the future.

     Finland's GDP will grow by 0.8 percent in 2015 under the conditions that the economy in the eurozone will continue to recover and the Finnish exports will maintain its market share, forecast Etla.

     Moreover, the general government deficit is widening and the debt-to-GDP ratio is rising significantly this year, said Etla. The ratio will reach 62.5 percent, which exceeds the threshold of 60 percent regulated by the European Union's Growth and Stability Pact.