Finland cuts economic growth forecast due to Middle East tensions

Finland has downgraded its economic growth outlook for the year, pointing to the ongoing Middle East crisis as a key source of uncertainty affecting recovery and inflation, News.Az reports, citing foreign media.

Finance Ministry director general Mikko Spolander said the crisis is contributing to instability in the global economy, with direct implications for Finland’s growth and price pressures.

“The crisis in the Middle East is increasing instability and uncertainty, hindering economic growth and driving inflation in Finland this year,” he said.

The Ministry of Finance now expects Finland’s gross domestic product (GDP) to grow by 0.6% this year, down from a previous forecast of 1.1% issued in December. Officials said the revision reflects weaker-than-expected recovery conditions as well as heightened external risks linked in part to developments in the Middle East.

Authorities added that any improvement in economic performance will depend heavily on how and when the crisis is resolved.

The ministry also warned that Finland’s public finances remain under strain, with the general government deficit expected to remain large and potentially widen further in the coming year.

Officials noted that global uncertainty is weighing on economic momentum and making inflation control more difficult, particularly for an export-dependent economy like Finland’s.

News.Az 

By Nijat Babayev