Finland’s economy in recession: Insights from the Ilmanen Economic Index
The Finnish economy is currently in a slump, as reflected in the Ilmanen Economic Index, which highlights employment trends for more than 60,000 companies and around 500,000 workers. The country’s economic health has come under scrutiny, with the index showing employment fell 2.8% in December, a sharper drop than November’s 2.3% decline. The only sector with an increase was communications and information technology, which recorded a slight increase of 0.5%. The economic downturn, characterized by high inflation and rising public debt in major EU countries, suggests Finland is heading into recession, said Jouni Vatanen, a researcher at Irmanen.
reveal economic recession
Finland’s consumer price inflation rate rose for the first time in five months in December, rising 3.6% year-on-year. This increase in inflation was mainly due to higher average interest rates on mortgages, consumer loans, and higher costs for packaged international holidays outside the EU. Utility costs increased by 4.54% annually in December, while medical costs decreased by 2.58%. Compared with the previous month, consumer prices in December fell by 0.3%, but rose by 0.3% in the previous month.
Number of employees: sharp decline
The sectors with the largest job losses were labor leasing, construction, hospitality, trade, transportation and industry. Regionally, the number of workers is decreasing in all regions of Finland, with eastern Finland experiencing the largest decline. Southern and western Finland saw some growth in the industrial and IT sectors, while northern Finland saw only growth in the transport sector. The Ilmanen Economic Index has been in operation since 2013, and its findings are based on salary data reported in the income register by companies that were Ilmanen customers throughout the observation period.
hope in recession
Researcher Jouni Vatanen suggests that despite the bleak economic outlook, the recession could be short-lived, depending on the global economy and influential countries such as the United States. However, at the beginning of the year, mistrust between trade unions and the government and demands for fair wages have increased uncertainty, and this does not offer much hope for employees. Nevertheless, the resilience of the Finnish economy and its potential for recovery remains in focus.