Finland cuts 2023 GDP growth forecast, eyes recession risk

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People work at a city infrastructure improvement site in Helsinki

HELSINKI (Reuters) -Finland’s finance ministry on Monday cut its economic growth forecast for 2023 and said the country was at risk of a recession.

The ministry now predicts gross domestic product (GDP) to grow by 1.7% in 2022 and by 0.5% next year when in June it had expected the growth to be 1.4% in this year and 1.1% in 2023.

“We face a period of stagnant growth and the risk of the economy ending up in a recession cannot be ruled out,” the ministry said in a statement.

“Uncertainty, energy shortages, fast inflation, decaying purchase power and rising rates will cut into the growth of consumption and investments everywhere,” it said.

It estimated consumer price inflation of 6.5% this year, up from 5.8% seen in June, and 3.2% in 2023, up from 2.7% predicted previously.

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(Reporting by Essi Lehto, editing by Terje Solsvik and Stine Jacobsen)

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