Ukraine crisis darkens Finland's economic outlook: Finance Ministry

Helsinki, April 14 (IANS) The Ukraine crisis has put the brakes on growth in the Finnish economy, according to an economic survey published by the country's Ministry of Finance.

Growth is predicted at 1.5 per cent this year, less than previously anticipated, the Ministry said in a press release.

Before the conflict began in Ukraine, the Finnish economy was recovering well from the Covid-19 pandemic, the Ministry added. However, Western countries' sanctions against Russia have further accelerated inflation, which has decreased household purchasing power.

"The sanctions will practically stop Finland's foreign trade with Russia, which will cut Finland's economic growth this year," the Ministry said.

The Ministry forecast in September 2021 that Finland's economic growth would be 2.9 per cent in 2022 and 1.4 per cent in 2023, Xinhua news agency reported.

A total cessation of energy imports from Russia could reduce the Finnish growth rate down to 0.5 per cent for two years, Mikko Spolander, Director General at the Ministry of Finance, said on Wednesday.

In the long term, the impact of the conflict in Ukraine will merge into structural changes in society and the economy, he added.

The impact of the Ukraine crisis will also extend to Finland's general government finances due to the deteriorating economic situation, reinforcing the need for preparedness and creating spending pressure, the Ministry said.

According to the Ministry, the Ukraine crisis has rapidly darkened the economic outlook in the euro zone and will have far-reaching repercussions for the global economy, as it erodes confidence, raises energy prices and accelerates inflation.