Finland Times

According to the IMF outlook, the country’s Gross Domestic Product (GDP) is set to increase 0.4 per cent this year.

Most estimates in the country project a zero rise or even a negative development.

According to IMF, the growth is partly driven by higher private consumption growth, as lower inflation and mortgage amortization holidays offered by major banks support households’ real purchasing power.

The growth rate is forecast to rise to 0.9 per cent in 2016. According to IMF, private investment is projected to start contributing to growth, supported by sizeable investments and new technology in the paper industry.

IMF estimates that the government’s comprehensive structural reform programme will accelerate growth. The programme, however, needs to be further developed. In this regard, IMF expressed support to the government’s intention to increase flexibility of the wage-setting system.

IMF said fiscal consolidation is needed to ensure long-run sustainability and respect European rules but it poses risks to short-term growth. According to IMF, fiscal adjustments should focus on measures which address long-term pressures.

Meanwhile, Danske Bank has downgraded the country’s economic outlook for the current year as well as for 2016.

The bank projects that the growth for this year will remain at zero per cent down from its earlier projection of 0.5 per cent. Next year’s economic growth has also been downgraded from 1.4 per cent to 0.8 per cent.