Finland’s economic growth has been delayed this year. Economic fundamentals have improved, as lower interest rates and lower inflation improve consumers’ purchasing power. However, the long period of weak confidence in the economy continues to weigh on consumption and investment.
The previously high-flying Danish economy has had its wings clipped as historical growth figures have been revised lower and industrial production has declined, particularly in the pharmaceutical sector. Despite reduced altitude, the Danish economy is still very strong.
The monetary policy tightening initiated by the ECB in 2022 halted economic growth in Finland and sent home prices tumbling. So why isn’t the monetary policy loosening that began a year ago having a positive effect on the Finnish economy yet?
Global economic uncertainty has eased as Trump’s trade policies have become clearer and the US has signed trade agreements with several countries. The Nordic countries are in a strong position, but growth is subdued.
The historically low wage share in the manufacturing sector presents a clear upside risk to wage growth and to Norges Bank’s forecasts in the coming years. Consequently, it may take even longer before inflation returns to the inflation target.
Denmark is characterised by being a small and open economy, offering numerous advantages in a global landscape marked by rapid changes. However, there are also drawbacks.
The turbulent global environment has impacted the Swedish economy, leading to slower growth and a subdued start to the year. However, households are becoming more confident, and we expect spending to pick up going forward.
Norwegian economic outlook: Limited room for rate cuts
Economic growth in Norway has picked up significantly, and the outlook is good despite global turmoil. Rising household purchasing power is the main reason for the current economic upturn.
Some of the downside risks in the global economy have vanished since our spring forecast due to President Trump’s trade deals and the fiscal agreement in the US.
Some of the downside risks in the global economy have diminished since our spring forecast, thanks to President Trump’s trade deals and the fiscal agreement in the US. However, growth momentum in many countries remains weak, relying to some extent on fiscal easing as consumers and corporates continue to exercise caution.
Invitation: Nordea Economic Outlook webinar – Navigating the shifting global economy
Join us for the release of the Nordea Economic Outlook on 3 September. Register for our webinar featuring Nordea’s Group Chief Economist Helge J. Pedersen, who will provide an in-depth look at Nordea’s latest economic forecasts.