Business Environment

Finland's economy continued to develop in the beginning of 2018 after a year of good growth in 2017.
 
The consumer confidence increased to a historically high level during the first quarter.
 
Employment rates continued to develop in a positive direction and increased to over 70 % during the first quarter of 2018. The positive development created better opportunities for increased consumption.
 
The inflation is still moderate in Finland. Consumer prices increased in March by 0.8 % while the corresponding number for the Euro zone was 1.4 %.
 
The prices for old row- and block house apartments increased by 0.8 % during January and February 2018 in comparison to the previous year. In the Helsinki region the prices increased faster while the prices outside the Helsinki region somewhat decreased.
 
The OMX Helsinki 25-index increased by approximately 2 % in January–March 2018 while the Nordic banking sector index decreased by approximately 11 %. Aktia's A shares rose by approximately 0.6 % in the same period.
 
The economic growth in Finland was balanced in the beginning of the year and was based on external demand as well as domestic
investments and consumption. The export reflected a strong demand for investment products in the rest of the world. The outlook for the export is uncertain and reflects the risk of the trade barrier discussion between USA and China leading to a widespread trade war throughout the world.
 
The interest rates in the Euro zone have stayed on a low level as a result of the loose monetary policy that has carried on since 2008. If the European Central Bank will uphold its previous signals one can even expect a termination of the ongoing buying program, which could lead to a tighter monetary policy than previously. The low interest levels have so far reacted moderately to the communication from the Central Bank. The over one-year interest rates have increased slightly. At the same time the continuously moderate levels of inflation in the Euro zone are speaking for a possible increase in interest levels in the future. The market expects that the negative interest rates are soon to be history, provided that the first steps towards normalising the monetary policy goes well.
 
(Updated 8.5.2018)