Finland Times

 

Bank of Finland governor Erkki Liikanen presented the economic forecast on Thursday. Photo – Lehtikuva.

The Bank of Finland’s new forecast for the global economy foresees a growth of a full 3 per cent in 2017–2018, which is slightly better than in 2016.

 

According to the Bank of Finland, growth prospects for the advanced economies have remained subdued.

 

Growth is being hampered by the slow improvement in productivity, reflecting possible delays in the introduction of new technologies and their slower diffusion, as well as the fading dynamics of the operating environment for non-financial corporations, said the Bank of Finland in a statement.

 

Bank of Finland also stated that the outcome of the EU referendum in the United Kingdom added to uncertainty on the financial markets in summer 2016, but the implications for market prices remained short-lived, except for exchange rates.

 

Long-term interest rates have also remained at record low levels in key economic regions.

 

According to the Bank of Finland, the slow growth will be supported by continued strong growth in the United States and China.

 

The inflation outlook remains subdued in the main economic regions. The current year will still be weighed by the decline in the price of oil that has already taken place. After this, improvements in economic prospects and the ongoing accommodative stance of monetary policy will gradually begin to boost inflation.

 

The growth in the United States is envisaged to accelerate to a good 2 per cent following this year’s slower interlude. On top of private consumption, fixed investment will also begin to bolster growth. 

 

In China, economic growth will continue to slow in an orderly manner, as the structure of the economy shifts from investment to private consumption.