Ukraine crisis may aggravate Finland's economic recession: Danske Bank

Source:Xinhua Published: 2014-3-19 8:41:51

The ongoing crisis in Ukraine adds to the difficulty to extricate the Finnish economy from recession this year, predicted Danske Bank in its Economic Outlook on Tuesday.

After two consecutive years of negative growth, Danske Bank lowered its forecast for the Finnish economy growth in 2014 from 1.1 percent made in last December to 0.5 percent, Finnish business daily Kauppalehti reported.

The slight growth will be based on gradual improvements of exports and domestic demand, according to the bank. The GDP growth of Finland will be 1.8 percent in 2015, if the country's exports return to rise.

Juhana Brotherus, an economist from Danske Bank, pointed out, "if the Russian situation is getting worse, it will aggravate Finland's economic recession."

The Russian share of Finnish exports is currently about 10 percent. If it reduces by one 10th, the total Finnish exports will drop by one percent, explained Brotherus.

He predicted that the cautious growth of the global economy will be inevitably reflected in the Finnish economy with positive signs in export orders.

However, the situations of Russia and Ukraine, the important trade partners of Finland, are getting detrimental.

"If sanctions are getting wider, visa bans become common and energy trade will be closed, these will impose a direct impact on the Finnish economy," added Brotherus.

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