People on Aleksanterinkatu in Helsinki on 23 December 2023. Finnish consumers’ views about their own financial situation are at their lowest level in over two decades, show data from Statistics Finland. (Vesa Moilanen – Lehtikuva)
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CONSUMER SENTIMENT in Finland has remained down in the dumps.
Statistics Finland on Wednesday revealed that its consumer confidence indicator stood at -13.3 in December, representing a drop of 0.9 points from November. The mood among consumers is being marred by concerns about personal finances, the national economy and the risk of unemployment.
The indicator has a long-term average reading of -2.4.
Statistics Finland highlighted that consumers are currently more pessimistic about their own financial situation than ever before since 2000, with over a third of consumers gauging that their own finances are weaker than one year earlier. While their expectations about the general employment situation have remained gloomy, their assessment of their personal risk of unemployment have risen well above usual levels.
Public views on the national economy remain bleak, despite mild improvement since the autumn. Over two-thirds of consumers estimated that the national economy is performing worse than a year ago, and less than one-fifth (18%) estimated that the economy would improve in the coming 12 months.
Confidence in the economy was the strongest in the capital region and the weakest in Eastern Finland.
Although the confidence indicator remains markedly low, it has improved from the all-time low of -18.5 in December 2022 – the culmination of the dramatic deterioration sparked by the Russian invasion of Ukraine.
The Confederation of Finnish Industries (EK) on Wednesday published the results of its latest business confidence survey, which reflect both budding optimism and lingering concerns. Sami Pakarinen, a director at EK, argued that the fact that the confidence indicator rose in all main industries is further evidence that business sentiment is over its low point.
“We have not seen a situation like this, where the confidence indicator is rising in all main industries, for quite some time. The last time we had a situation like this was October 2021,” he said.
The budding optimism among businesses will not translate to economic growth, though, as the confidence indicator continues to point to clearly weaker economic growth than forecasts suggest.
“Along with the recovery of confidence, the decline in interest rates is positive as it increases demand in the economy. At the same time, you have to keep in mind that the fragility in investments will continue to drag down the economy for a long time,” said Pakarinen.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
