Nordic Outlook March 2017

Economic and financial trends

  • Denmark: A peculiar upturn
    - The fairly strong recovery continues but it is not resulting in much top-line growth for businesses. •
  • Sweden: Changing the narrative on inflation
    - Increasing employment is not resulting in significantly higher inflation. •
  • Norway: Out of the crisis
    - Growth is normalising as the oil sector is bottoming out. •
  • Finland: Firing on all engines
    - Consumption and construction drove growth in 2016; investments and exports are next.

Normalising Nordics: No longer standing out from the crowd

So far this decade, the Nordic economies have stood out from the European crowd. Sweden has achieved some of the highest GDP growth rates among rich countries. Norway has had an oil boom and then an oil-induced setback as other countries recovered. Finland’s GDP shrank three years in a row. Only Denmark has looked very much like the European average in terms of growth in recent years.

This is now changing. Swedish growth is still supported by consumption and housing investment but not to the same extent and the growth rate has more or less halved since 2015. Norway is poised to recover from its slump, as we are nearing the bottom for oil investments for now. The Finnish recovery is already well under way after a surprisingly strong boost from domestic demand finally lifted growth into recovery territory last year. While the headline disappointed somewhat in Denmark in 2016, underlying growth is ticking along.

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