Finland cuts growth forecast, citing Mideast crisis as key ‘uncertainty’

Finland has downgraded its economic growth forecast for this year, citing the ongoing Middle East crisis as a key source of "uncertainty" affecting recovery and inflation, according to Finnish broadcaster YLE on Thursday.

“The crisis in the Middle East is increasing instability and uncertainty, hindering economic growth and driving inflation in Finland this year,” Finance Ministry director general Mikko Spolander said.

The ministry said it now expects gross domestic product (GDP) to grow by 0.6% this year, down from a 1.1% forecast issued in December.

It said the revision reflects weaker-than-expected recovery conditions and increased external uncertainty linked in part to developments in the Middle East.

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

It also warned that Finland’s public finances remain under pressure, with the general government deficit expected to stay large and potentially widen over the coming year.

The ministry noted that global uncertainty is weighing on economic momentum and complicating inflation control efforts.

Officials said the revised outlook reflects broader risks to the export-driven Finnish economy amid volatile international conditions.