Finland Outlines Future Interest Rates And Public Debt

On Thursday, the European Commission released details about its economic forecast for the country of Finland. The news was good for consumers of the country. The Commission explained that the country’s economic growth had continued due to a handful of factors, including rising employment, high confidence levels and low interest rates. There was some bad news as well. First and foremost, the Commission believes that Finland’s economy will continue to grow this year and next year at a faster rate than the European Union average.

However, it has scaled back on its previous expectations. The Commission believed that the Finnish economy will grow about 2.5% in 2018. In 2019, it is believed that it’ll grow by as much as 2.3%. The numbers released earlier were slightly better. Previously, the forecasted numbers were 2.7% and 2.4% respectively. The report indicated that improved stability and balance among public finances and a faster growth in gross domestic product has helped. The report also states that the country’s debt to GDP ratio has sped up significantly. Last year, the numbers were 61.4%. It is believed that they’ll drop to 59.6% in 2019.

Should the forecast prove to be accurate, the debt to GDP ratio would better align Finland with the European Union’s Stability and Growth Patch. While the country’s public debt soared above the 60% limit in 2014, they were not sanctioned. Another thing consumers need to be aware of is the country’s mortgage interest rates. They just happen to be the lowest in the Eurozone. This is why so many Finland residents are using to find loans. However, it should be noted that the country’s interest rates aren’t fixed. Therefore, they would be much riskier in the long run.

The ECB, European Central Bank, concluded that the average housing loan interest rate in the country during February was right around .92%. That made it the lowest in the entire European Union. The chief economist, Heidi Schauman, admits that the rates are so low, because they are connected to variable market rates. There, when getting a loan from, it is absolutely pertinent to pay close attention to the interest rates. They can change erratically very quickly.

Citizens in Finland will be happy to know that their economy is remaining in shipshape condition following a solid fourth quarter last year. In fact, the unemployment is at the lowest that it has reached in the past five years. This is pretty amazing when consumers consider the state of other nations’ economies. Along with this, consumer confidence is at an all-time high. The manufacturing, construction, and service sectors have also seen huge rises. Unfortunately, even with this good news there still has been some political tension on the rise. While the government does plan on passing new reforms that will cut its annual spending and trim their debt to lower than 60 percent, some parties are opposed. However, the prime minister has announced that if these reforms do not pass he plans on dissolving the government.

Whether or not he truly has the power to do this is still unseen, but it without a doubt has many politicians and citizens on edge. The future should be bright for residents of Finland. It is believed that the interest rates will remain low. However, it should be noted that banks are not going to continue operating under losses for the long term. Aktia Bank believes that the rates could rise next year.

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.