Finnish News Recap, week 37: Ready for Recession edition
ECONOMIC WOES: Finland is about to enter to a recession. Some of the latest prognoses came last week from Bank of Finland and the think tank PTT.
According to BoF, they expect “Finland's economy to contract by 0.2 percent this year. This is a very slight improvement on the June forecast, which predicted Finland's economy would shrink by 0.4 percent in 2023.” Furthermore, “The long-standing upward trend in Finland's employment rate will decline to 77.9 percent this year, the bank forecast, down from 78.1 percent last year. Next year, the employment rate is expected to continue its decline to 77.7 percent, before rising to 78.0 percent in 2025.”
Spearheading this gloomy development is the situation in the Finnish housing market and thus also in the construction industry, as analyzed by PTT. PTT is one of Finland’s leading economic think tanks, connected to the agricultural sector and rural cooperatives but commenting on a wide range of issues. PTT particularly notes the rising interest rates and falling consumption as a source for housing woes.
It’s been known top anyone even thinking about a house switch that the housing market has been almost at a standstill for over an year. We certainly experienced this personally when searching for a new apartment, only luckily obtaining a buyer for old our one thanks to the virtue of my connections. We got less than we had wanted, but that’s OK, since we could also buy the new one relatively inexpensively. After all, housing prices have fallen considerably already, and according to OP Financial Group, Finland’s largest Financial services provider, they are set to keep on falling.
When houses aren’t being sold or bought, they aren’t being constructed, either, which creates a self-feeding loop, causing a potential for a real crisis for the construction business. It is unclear to what extent the government is willing to offer a bailout, whether it even should or whether this would help, though it could be guessed that the government’s plans to cut the housing subsidies – a crucial thing for even many working families to keep on working in the growing urban regions – goes through.
Housing market isn’t the only market showing acute signs of distress – wood industry, for instance, is also experiencing problems (not that this is anything new), and of course the crisis in agriculture has been going on for some time now. None of it is certainly not going to make the government’s task of squaring the circle of combining austerity with a sluggish economy easier – perhaps proven by the earlier indications, just confirmed yesterday, that the budget will still be heavily in debt. There’s no clear indication of new sectors coming in to save the economy, or a clear plan for such.
FURTHERMORE:
SCHOOL VIOLENCE: An on-and-off discussion for the past years has been the issue of school violence, and youth violence in general. For instance, one notable school safety issue involved parents withdrawing an entire class from school – 20 students – due to one violent student out of control. This situation was later resolved with the violent student moving elsewhere. Such parental activity is not all that common in Finland.
What is getting more attention than such news events, however, is a constant stream of videos of kids getting humiliated, stereotypically with perps being of immigrant background. While videos spread online probably won’t give one a full sense of the picture, it’s at least clear that the social media itself is a factor in all of this, giving rise to a new culture of potential humiliation that’s compounded by the strangers’s desire to spread these videos themselves, for whatever purpose.
PRESIDENTIAL RACE: The presidential race keeps going on with Left Alliance leader Li Andersson announcing her candidacy. Though the old left parties – Social Democrats and Left Alliance – are unlikely to succeed in this election, the Green candidate Pekka Haavisto is also not quite as sure a winner as previously, as a new poll showed that he’s in dead head in the second round with the other main candidate, National Coalition’s Alexander Stubb – who is doing better than I had expected.
AIDES AND SECURITY: A thing about the Finns Party being a populist party is that they are not all that used to situations where they actually need to put up people to important state posts, not only politicians but aides to ministers and so on. Just last week, an aide to minister Lulu Ranne quit without explanation, while another one did not pass Finnish state police security check.
In other news, Finland is now banning entry to Russian cars without a special reason and the Nazi potential terrorist trial reveals details about them being a bunch of scrubs. Also check this interesting story about how Finland punches above its weight in American Football in Europe. Perhaps there just are more people who have been exchange students in US in Finland per capita than in other Euro countries?
Image: Apartments being constructed in happier times. https://commons.wikimedia.org/wiki/Category:Building_construction_in_Finland#/media/File:Apartment_building_construction_in_Hernesaari,_Helsinki,_Finland,_2007_April.jpg