HELSINKI, Sept. 16 (Xinhua) -- The recovery of Finland's economy is expected to be slow due to weak private consumption and sluggish investment growth, the central bank said in a press release on Monday.

According to the Bank of Finland's newly released interim forecast, the Finnish economy is expected to shrink by 0.5 percent in 2024. Growth is projected to resume in the following years, with the economy expanding by 1.1 percent in 2025 and 1.8 percent in 2026.

The central bank attributed the sluggish economic development in early 2024 to weak private consumption and investment, saying that fragile growth has been primarily supported by exports and demand from the public sector.

In addition, the sluggish economy has impacted the labor market, while inflation has slowed significantly, according to the Bank of Finland. Due to the weak economic performance, the bank projects that the unemployment rate will rise to 8.3 percent this year, but will then decline as the economy improves.

It predicted that the country's economic recovery in the coming years will be driven by improved employment and increased purchasing power. Additionally, a strengthening eurozone economy is expected to boost Finland's export prospects, further supporting the recovery.

The bank also expects household and business confidence to recover gradually as interest rates in financial markets are projected to decrease over time.

Geopolitical tensions, however, are contributing to uncertainty about the global trade outlook. Domestically, the key risks include how long consumer caution will persist and when the construction industry will begin to recover. Enditem

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