Key economic indicators
%, ETLA's forecast, June 2002 (f=forecast)

ETLA's commentary:
World economy appears to recover faster than expected

First evidence of the recovery of the world economy is in. Particularly the economic performance of the United States has surpassed expectations in recent months. The country's industrial output turned up in January after a 15-month continuous decline, and this upturn continued in February and March. Business confidence barometers point to continued output growth. Consumer confidence has also increased over the past months. Forecasters have significantly raised their U.S. growth estimates for this and next year.

Export outlook sharply better

The Research Institute of the Finnish Economy (ETLA) estimated in March that Finnish economic growth may pick up toward the end of this year as the international economy gradually gains strength. Recent economic news support this view. ETLA estimates in its most recent June review of economic conditions that reviving export demand will provide much needed tonic to the Finnish economy. Support for this view is also provided by a survey published in May by the Confederation of Finnish Industry and Employers (TT), which indicates that the business expectations of exporters have continued their strong climb. The economic outlook has improved particularly in the forest, metal and electronics industries. Modestly increasing order backlogs are especially encouraging.

Finland's total output to grow by 2% in 2002

ETLA forecasts that Finland's GDP will grow by roughly two percent this year. This growth rests on exports and private consumption as investment spending may actually decline. Exports will be powered by the electronics industry. The growth of private consumption, in turn, will be spurred on by stronger demand for automobiles. Investment spending will pick up notably only at the end of this year and next year as uncertainty over the recovery of demand gradually subsides and companies need additional production capacity. In 2003 total output will grow fast as both exports and investment spending will grow briskly and private consumption will be robust.

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Recession bottoms out
Order books start to fatten after a long interval. Approximately one third of Finnish corporate executives expect that production will increase strongly and exports pick up in the coming months.
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