Finland’s GDP to shrink two percent this year

recession2The Finnish ministry of finance stated on its website that it expects the nation’s gross domestic product (GDP) to drop by more than two percent in 2009. Higher costs for financing building deals and a stagnant housing market caused a sharp decline in the construction industry at the end of 2008, causing Finland’s GDP to noticeably slow down.

Export markets also dropped off at the end of 2008, which caused industrial output to also significantly decline. All of these factors will eventually lead to higher unemployment rates in 2009, which will naturally force households to cut back on their local spending.

The Ministry of Finance’s website added that since Finland is heavily dependent on exports for its economic strength, the recovery of Finland’s economy is “intimately connected with the cyclical state of the international economy.” Some experts believe the global economy could begin to recover by the end of the year. If this happens then the Finnish economy has a chance of beginning its own domestic recovery before 2010.