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Macro Comment Finland

Macro Comment Finland — Strong job market underpinning the Finnish economy

The robust labour market is fuelling household income growth creating favourable conditions for consumption. Hence, the outlook for GDP growth remains positive. Strong job gains are bringing positive surprises for the public sector economy as well; against all odds, the government may well reach a balance this year.

Tiina Helenius, Chief Economist Finland | tihe01@handelsbanken.se

Macro Comment Finland — New government aims to get Finland back on track

According to its pragmatic programme, the new three-party government led by Prime Minister Juha Sipilä prioritises expenditure cuts, reorganising social services and deregulation over tax hikes. Moreover, if labour market organisations do not agree to a 'social contract' this summer to improve Finland's competitiveness, additional austerity measures will follow.

Macro Comment Finland — Finland lost its AAA credit rating

Finland is no longer a member of the small group of eurozone nations with a full set of top credit ratings. Standard & Poor's has cut Finland to 'AA+' from 'AAA', citing persistent economic growth problems. The downgrade was not a huge surprise, however, as several risks have hit the structurally fragile economy.

Macro Comment Finland — More lean and mean government

The Finnish government agreed on a EUR 9-10 billion plan to close the sustainability gap of the public sector. The aim is to make government leaner and more efficient and to boost the supply side of the economy.

Tiina Helenius, Chief Economist Finland | tihe01@handelsbanken.se

Macro Comment Finland — Local election results unlikely to change Finland’s stance towards EMU

The Finns Party's victory was less dramatic than widely expected in Sunday's municipal elections, as it was unable to renew its position as the third largest party by electoral vote. The government likely considers this a mandate to continue with the domestic reforms and current stance towards the euro crisis.

Macro Comment Finland — Finnish municipal elections bare significance beyond borders

Finland will hold municipal elections on October 28, 2012. In a sense, this election measures the overall support of the electorate for a variety of issues the current government policy is trying to steer. One of these issues is the Finnish EMU membership and stance to the euro crises. If the main opposition party, the Finns Party, is able to cement its political following and secure its position as a major political force, the pressure from this opposition party is likely to colour the politics of current government when it comes to Finland's stance on the euro crises.

Tiina Helenius, Chief Economist Finland | tihe01@handelsbanken.se