Main Features of Finnish Economy in 2010 - 2011

1. The world economy is slowly recovering from a severe recession as economic growth gradually picks up especially in industrialized countries.
   Return to pre-recession production volumes is not going to happen any time soon.
2. Asia is the engine of the world economy, whereas growth remains fairly modest in the United States and Europe.
3. Big challenges lie ahead after the recovery. Economic stimulus should come to a halt at a convenient time, not too late and not too soon.
   Also, many countries face unpleasant political decisions in order to narrow stimulus driven public sector deficits.
4. We expect world economic growth to reach 3-4 per cent in 2010 and 2011.
   Growth rates remain much lower in the Euro Area and the U.S., only ½ and 1½ per cent in 2010.
5. We expect the Finnish economy to recover slowly. The expansion in GDP is expected to be a fairly modest 1½ per cent in 2010
   following a very unusual fall of 7 per cent this year.
6. Economic activity remains weaker than normal in 2010. Exports increase moderately, but the fall in private investment is expected to continue most of the year.
   Further deteriorating employment is a drag on private consumption especially on the first half of 2010.
7. We expect goods exports to increase by 5 per cent in 2010. It is definitely not a lot after a 25 per cent decrease this year.
   A more decent rise in exports will probably not be seen before 2011.
8. The contraction of private investment continues in 2010. Investment in machinery and equipment falls.
   Investment in non-residential buildings declines further, while investment in dwellings seems to be heading for a mild recovery.
   Civil engineering is doing fine for the time being.
9. Private consumption falls by 4 per cent this year and increases by only one per cent in 2010 as employment continues to weaken.
   The domestic consumer price inflation is expected to accelerate to 1.8 per cent next year as interest rates rise from unusually low levels.
10. A new slow down in economic activity following the current recovery is a major risk.