HELSINKI, Jan. 23 (Xinhua) -- OP Financial Group of Finland on Thursday downgraded its forecast for Finnish economic growth, citing increased global political uncertainty.
In a press release, OP's economists lowered the growth forecast for the Finnish economy in 2025 from the 2.0 percent predicted in October 2024, to 1.7 percent. However, OP said the growth of Finland's gross domestic product (GDP) in 2026 will reach 1.5 percent, higher than an earlier forecast of 1.3 percent.
Slower-than-estimated growth in Europe's export markets and increased international political uncertainty will slow down the recovery of the Finnish economy, the financial group explained.
Finland's exports took an upward turn last year, OP said, driven by service exports in particular. The momentum will remain fairly good both this year and the next, but economic recovery will be slowed down by the subdued development in the European markets.
"The global economy is at a crossroads," said OP Financial Group's chief economist Reijo Heiskanen, adding that increased obstacles to trade and the continued stagnation and structural problems in the industrial sector may keep growth at a low level.
Economic growth in the United States is expected to continue at a good level, OP said, but will be more moderate than in previous years.
Meanwhile, economic growth in the euro area was lower than expected in 2024. Uncertainty over trade policy solutions and domestic policies will hinder the economic recovery. Economic growth will remain sluggish in the coming years, although the decline in interest rates will gradually boost the economy.
The European Central Bank (ECB) may continue to gradually relax its monetary policy, and the ECB's deposit facility rate is expected to settle to around 2.0 percent in 2025, OP predicted. ■