Finns have never been as pessimistic about their own economy as they are today
CONSUMER CONFIDENCE In Finland, it has fallen to its lowest level in the 27-year history of Finnish consumer confidence measurements.
Statistics Finland on Wednesday was revealed that consumers’ expectations about the development of their own financial situation continued to deteriorate already in June from an already low level, and 28 percent of the respondents estimated that they were worse than a year ago.
Almost a third of the respondents were worried about their financial situation deteriorating in the next 12 months. Instead, more than a fifth (22%) of respondents expected their financial situation to improve.
Pertti KangassaloThe leading statistician of the Statistics Finland, emphasized that in general – and as recently as last winter – almost 30 percent of consumers expect their financial situation to improve and only 10 percent to see their financial situation deteriorate in the next 12 months.
“We live in an extraordinary time of caution and eroding economic confidence,” he compressed.
“Consumers in Finland are typically very confident in their own economy and its positive development in the future, which is why consumers’ views on their own economy are currently very pessimistic.”
The pessimism is due to the employment effects of the coronavirus pandemic and the rise in inflation and interest rates caused by Russia’s invasion of Ukraine. Kangassalo pointed out that inflation has been tangible, especially in the prices of fuel, food and electricity, all of which have direct effects on consumers’ finances.
“People still consider their own economic situation quite good and don’t really feel the threat of unemployment,” he added.
Consumers’ expectations of the national economy remained unchanged in July.
As many as three-quarters of consumers felt that the financial situation has worsened in the past 12 months, and more than half that the situation will continue to worsen in the next 12 months. Only 13 percent of consumers expressed their confidence in the improvement of the economic situation.
The Finnish Confederation of Business and Industry EK reported on Wednesday that Finnish companies have reduced their expectations in all main industries in response to slower-than-expected economic growth due to the war in Ukraine. The war has led to a halving of this year’s growth forecasts from around three and a half percent. Sami PakarinenDirector of EK.
He added that due to the strong start to the year, the realization of the forecasts would require a significant slowdown in the economy.
“The companies’ recent estimates suggest that Finland’s economy will slow down significantly, and even a recession cannot be ruled out,” he commented. press release from EK.
Labor supply is expected to be the biggest obstacle to economic growth, and already 40 percent of companies in the service sector consider it a problem. The growth of the industry is especially slowed down by the shortage of logistics workers and the strong drop in demand related to the erosion of consumer confidence.
According to Pakarinen, the shortage of energy and materials is particularly reflected in construction and industry.
“Construction is already in decline because production expectations have collapsed and the workforce is decreasing,” he said. “Industry has withstood the economic situation, but even there the growth of orders and production is stopping.”
Aleksi Teivainen – HT