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Nordic Outlook March 2017

Economic and financial trends

  • Denmark: As good as it gets
    - The recovery has gained momentum, but is not likely to accelerate further. •
  • Sweden: Was that it?
    - Growth is stabilising at a lower level, but is also becoming better balanced.
  • Norway: Returning to normal
    - The recovery is beating expectations.
  • Finland: Full speed towards potential
    - Strong growth is rapidly normalising the economy.

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.