Finland may see gradual economic growth this year as its export markets start to recover, according to the central bank.
The Bank of Finland raised its projection for the northernmost euro member, and now sees economic expansion of 0.2 percent, versus the 0.1 percent contraction forecast in December last year, it said on yesteday. GDP growth will accelerate to 1.2 percent next year and 1.3 percent in 2017, it said.
Though the forecasts represent an improvement, they still reveal a much weaker recovery in Finland than in the eurozone on average.
“Finland will not reach the euro area pace of growth even in the next few years,” the central bank said.
The pace of Finland’s output expansion “could turn out to be even lower if the global economy were to improve more slowly than expected,” it said.
Finland’s economy has contracted since 2012 after its consumer electronics industry disappeared and demand for newsprint declined, depleting its manufacturing base. At the same time, a deterioration in labor-cost competitiveness and Europe’s ongoing economic crisis sapped demand for its exports.
“The Finnish economy is facing headwinds, with no strong growth recovery in view,” Bank of FinlandGovernor Erkki Liikanen said in the report.
The new government says it is pursuing a swathe of measures to plug a 10 billion euro (US$11.3 billion) gap in long-term finances. It wants to improve productivity by negotiating a social contract with trade unions and employers that would moderate wage gains, as well as balance public finances through spending cuts. It is also pushing for an economic overhaul.
“The scale of the fiscal adjustments envisaged by the government is justified,” Liikanen said. “Population aging will already weigh more on the general government fiscal balance in the next decade.”
Three prominent Finnish business leaders on Tuesday vowed to take a 5 percent pay cut to support the government’s push for across-the-board wage reductions and urged other to do the same.
“I myself have decided to donate annually a significant amount of money over the next four years, with a focus on education and research,” Confederation of Finnish Industries head Matti Alahuhta said.
Additional reporting by AFP
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to