Nordea Economic Outlook: Northern Lights

The global economy was characterised by a high degree of resilience in a tumultuous 2025, and there are prospects for renewed growth this year. There are, however, significant risks associated with the unpredictable geopolitical situation, exemplified most recently by President Trump’s punitive tariffs on several EU countries in the dispute over Greenland. The debt problems in several of the major industrialised countries may also cause concern. The monetary policy easing cycle is nearing its end, but political pressure could lead to further interest rate cuts in the US.

The Nordic economies are demonstrating resilience in the face of global challenges, with countries across the region showing varying degrees of recovery or stabilisation. While growth patterns differ, common themes include increasing private consumption, strong labour markets and well-positioned export sectors. Despite some sectoral challenges, the overall outlook remains positive, underpinned by sound economic fundamentals, says Helge Pedersen, Nordea Group Chief Economist. 

The Danish economy is well-positioned to face future challenges, bolstered by record-high employment and strong public finances. This year, household consumption is expected to drive a larger share of economic growth. Housing prices are expected to continue rising, albeit at a more moderate pace than before.

Finland’s economic growth has been sluggish, with weak consumer confidence and falling housing prices hampering private consumption and construction investments. However, improved economic fundamentals provide conditions for recovery, with early signs of improvement visible in the manufacturing sector.

Growth in the Norwegian economy is broadly in line with the long-term trend, and unemployment remains low. Inflation is expected to ease gradually but remain above Norges Bank’s target, limiting the scope for further rate cuts. However, a stronger NOK could lead to one more rate cut before summer.

Swedish households have regained confidence, boosting consumption prospects, while exports remain resilient. Unemployment is expected to fall, and inflation should remain low before normalising in 2027. Improving economic conditions may reduce the need for monetary stimulus, although global risks persist.

Read Economic Outlook here.

For further information:

Helge J. Pedersen, Group Chief Economist, Mob: +45 22697912
E-mail: helge.pedersen [at] nordea.com (helge[dot]pedersen[at]nordea[dot]com) 

 

Nordea is a leading Nordic financial services group and the preferred choice for millions of customers across the region. For more than 200 years, we have proudly served as a trusted financial partner for individuals, families and businesses – enabling dreams and aspirations for a greater good. Our vision is to be the best-performing financial services group in the Nordics, accelerating through our scale, people and technology. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges.