Economic Survey, September 2009

Economic Survey, September 2009
15.09.2009 | pdf, 1,4 Mt

Summary

The global economy contracted very sharply in the latter half of 2008 and fell into a deep recession in early 2009. The recession in the real economy was triggered by a crisis in the financial market, which remains in a state of disequilibrium despite a slight improvement in bank balance sheets. Risk premiums, which are reflected in lending and interest rates, have declined but still remain at a high level. In the near future both banks and businesses will continue to have difficulty securing long-term financing. The global economy will begin to recover towards the end of the year. In Finland, however, it will take some time for recovery to take hold. Even though the fall in output has now slowed, the national economy will contract 6% this year and record only marginal growth in 2010. The unemployment rate will continue to rise. Public finances will deteriorate sharply. It is projected that general government balance will slip into deficit for the first time in more than ten years and drop to -4.5% of GDP in 2010.