Finland economy 2025 is projected to move forward only slowly, with Danske Bank warning that a full recovery will not arrive until 2026. The bank expects GDP to grow by just 0.9 percent in 2025, followed by 2.0 percent growth the year after. High unemployment, low consumer confidence, and trade tensions are named as the biggest hurdles.
Kaisa Kivipelto, private finance economist at Danske Bank, explained that Finland is starting to come out of its long stagnation. She noted that even if the path ahead is fragile, the overall outlook shows signs of life returning.
GDP data from Statistics Finland painted a mixed picture. The economy shrank by 0.4 percent in the second quarter of 2025 compared to the previous quarter. When adjusted for working days, GDP showed no change compared with the same period in 2024.
Still, Danske Bank highlighted some positive signs. Falling interest rates, low inflation, and rising real wages have boosted household purchasing power. This should help lift consumer spending in early 2026, strengthening the domestic side of the economy. Industrial confidence is also improving as companies adjust to the 15 percent tariff level in place between the European Union and the United States.
Construction is another area where growth is expected. Lower financing costs and more stable input prices are slowly pushing the sector toward recovery in 2025.
Labour market weakness remains the most serious risk. Unemployment is above 9 percent and continues to limit household spending. Danske Bank expects gradual improvement in 2025, especially as rising real wages begin to restore consumer confidence. Kivipelto stressed that a stronger job market is vital if Finland is to build sustainable recovery.
On the same day, Nordea Bank released its own outlook, offering a more cautious forecast. It cut its 2025 GDP growth estimate from 1.0 percent to 0.5 percent, while lowering the 2026 forecast from 2.0 percent to 1.5 percent. Both banks underlined that external demand and trade policy remain unpredictable and that export-driven sectors face the highest risk if global disputes escalate.
