Finland’s Economy to Grow 0.6% in 2025 Amid Global Uncertainty, PTT Forecasts
Helsinki, The Gulf Observer: Finland’s economy is projected to grow by just 0.6% in 2025, according to a forecast released by Pellervo Economic Research (PTT). The report warns that global instability and increasing trade barriers are hampering economic recovery both domestically and internationally.
Despite low inflation, a rebound in construction, and signs of improving consumer purchasing power, Finland’s economic growth remains constrained by geopolitical tensions, policy uncertainty in the United States, and rising public deficits driven by defense spending.
The forecast, published on Tuesday, anticipates a modest improvement in 2026, with GDP growth expected to reach 1.7%.
“The forecast has been prepared in exceptionally uncertain conditions,” said Emilia Gråsten, an economist at PTT. “Developments in international politics are now shaping Finland’s and Europe’s economies more directly than before. A ceasefire between Ukraine and Russia may occur, but there are few signs of lasting peace. Meanwhile, Trump’s proposed tariff policies are already weakening growth prospects in the US, China, and Europe.”
While prolonged trade tensions threaten global investment and export demand, Finland’s service exports to the United States are expected to remain relatively resilient, as they are less affected by tariff changes compared to goods exports.
Across Europe, fiscal stimulus and increased public spending are driving stronger growth expectations for 2026. Germany’s large-scale investment program is expected to benefit Finnish export industries in particular.
PTT also noted that interest rate cuts in the eurozone are nearing an end, with the European Central Bank likely to adjust its policies in response to fiscal expansion. The forecast projects that the 12-month Euribor will average 2.3% in 2025 and rise to 2.5% in 2026. However, if geopolitical risks in Ukraine or the US escalate, interest rates could decline again, potentially returning to zero.
