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3 Sep 2025 – Insights

Nordic Outlook: Economies stay on track despite all the risks

Growth is expected to be around normal levels, with several risk factors including too much of a slowdown in the US, delayed effects of tariffs, and politically induced uncertainty. This is one of the conclusions in the latest Nordic Outlook.




In the new Nordic Outlook, Danske Bank expects economies to cruise at more or less their structural growth rate over the coming year.

However, the full effect of the tariff increases has still not been seen, and significant political uncertainty is creating downside risk.

“Fears, that the US tariffs would cause an immediate recession, have not materialized – not in the US and not elsewhere. We do see effects from tariffs on prices and profits, but the effects on sentiment have not been big enough to create an economic downturn,“ says Heidi Schauman, Global Head of Research at Danske Bank, who also emphasise that the risk picture is still very complex.

“Looking forward, we continue to see normalization and quite normal growth on a global scale, but it goes without saying that the risk picture is still complex and difficult,”

See Heidi Schauman explain more about the new Nordic Outlook:





Highlights from Nordic Outlook 

See Heidi Schauman, Global Head of Research at Danske Bank, explain more about the new Nordic Outlook or download the entire report.

Download Nordic Outlook

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Danish economy loses a little of its shine
In Denmark, major data revisions have resulted in lower growth figures, both historically and forecasted, while lower expectations at Novo Nordisk have also dampened the growth outlook.

However, weaker growth in recent years leaves more room for growth in the time ahead. This is especially the case for private consumption, which now looks very low relative to incomes.

Danske Bank’s forecast remains one of higher growth in the economy ex-pharma in the time ahead, driven by increased purchasing power, lower interest rates and more expansive fiscal policy.

The Swedish economy underperforms expectations
The Swedish economy has underperformed in 2025, marked by high inflation and weak growth.

The weaker economic outlook is most evident in the labour market. However, consumption has increased, and interest rate cuts and real income growth provide some relief.

Housing prices are pressured by higher interest rate expectations, but the outlook is brightening.

Inflation remains too high, complicating the Riksbank’s ability to implement further rate cuts to support the slow recovery.



Our chief economists share their view on the Nordic economies


Denmark

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Sweden

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Norway

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Finland

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Norway: Stronger growth driven by acceleration in productivity
In Norway, growth has picked up significantly and productivity growth has risen and was close to the historical average.

The labour market remains tight, driven by strong demand for labour, but higher productivity has resulted in higher unemployment despite stronger growth.

Inflation has been as expected and allowed Norges Bank to cut the policy rate in June and signal further cuts ahead.

Finland: Slowly towards better times
In Finland, growth is slowly picking up after multiple difficult years. Falling interest rates, low inflation and rising salaries continue to boost household purchasing power, but the high unemployment rate restrains consumer sentiment and spending.

The industrial sector is experiencing better momentum with more order inflows despite the trade war and a muted global industrial cycle.

The housing market outlook has continued to improve cautiously during the first half of the year with more transactions, but prices are still to follow. Housing construction remains muted, but the outlook for 2026 is slightly better. The public deficit remains large in the near term but is expected to gradually shrink over the coming years.

Nordic GDP forecasts

 Country

 2024

2025 

 2026

Denmark 
3.5% 1.8% (3.2%) 2.3% (2.5%)
Sweden
0.8% 1.1% (1.6%) 2.0% (2.5%)
Norway
0.6% 1.9% (1.7%) 1.6% (1.6%)
Finland
0.4% 0.9% (0.9%) 2.0% (1.7%)

Paranthesis are projections from June 2025