The economic consequences of the war in Ukraine have also had an impact on Finland's economy. Finnish exports decreased by 2.9 percent from the previous quarter, while imports fell by 2.4 percent from October to December 2022. The Finnish economy was up 2 percent compared to 2021 for the year as a whole.
The government and central bank forecast a small decline in GDP in 2023, of around 0.2 percent, before growth returns in 2024 and 2025, according to their latest forecast in December. The margin of error in economic predictions may make the forecast uncertain, according to experts.
Sweden has not seen two consecutive declines in its GDP, but its economy has shrank by 0.2 percent in the fourth quarter compared to the same period a year ago, according to the national statistics office SCB. There was a decline in business investment and household consumption in many parts of the economy. The Swedish economy increased by 2.6 percent for the full year of 2022, according to the SCB. The Swedish central bank expects GDP to fall by 1.1 percent this year, in line with the European average, according to its latest forecast in early February.
Despite the technical recession in Finland and economic challenges in Sweden, economists suggest that the term technical recession is a poor indicator of the actual economic situation. Niku M tt nen, a professor at Helsinki University, said there was no universally accepted definition of a recession in economics. The term should be used when there are significant declines in economic activity across several key indicators, such as production, employment, consumption, and investment.
The economy of Finland is expected to see zero growth in the coming year. The economic growth in Finland is expected to continue as a result of the war in Ukraine on consumer and business confidence. The uncertainty in economic forecasts highlights the need to be cautious in interpreting economic data and the importance of considering multiple indicators when assessing the health of an economy.