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According to the most recent provincial forecasts by OP Economists, positive GDP growth is expected in 2025. The economy of almost all Finnish provinces is expected to turn to growth in 2024-2025, when the economy will recover from recession.
The province’s forecast is based on the OP’s economic forecast from April, according to which Finland’s GDP will shrink by 0.5% in 2024 but grow by 2.0% in 2025.
– The best performing regions are growth centres such as Uusimaa, Pirkanmaa and North Ostrobothnia. Also in northern Finland, Lapland and Kainuu are expected to grow relatively strongly. Kainuu’s economy has been particularly strong in recent years, and growth is expected to be almost on par with the average for Finland as a whole in the coming years, said the chief economist of OPEC Financial Group. Tommy Cotella The announcement stated.
Between 2023 and 2025, the average annual growth rate for the provinces is expected to vary between a 0.7% increase and a contraction of almost 1%. Finland as a whole will grow by 0.2% over the same period.
According to the forecast, the differences in economic development between provinces are still mainly due to demographic development. In some provinces, the population is increasing, while in others, it is decreasing.
Weak economic situation As a result, the labour market has become more normalised. However, there are differences between provinces. In Lapland, Kainuu and Southern and Northern Ostrobothnia, the labour market remains exceptionally tight and provinces can be considered to have a labour shortage. This could limit future growth.
The economic recession has led to an increase in unemployment in almost all provinces in 2023. However, the development of unemployment is uneven, with a decrease in the provinces of Söderbotten, Lapland and Valsinai.
Last year, the highest unemployment rate was recorded in Kymenlaakso, where the unemployment rate was just under 10 percent. The lowest unemployment rate was recorded in Southern Ostrobothnia, where the rate was just over 4 percent.
The production structure of the provinces is converging, with a decreasing share of processing and an increasing share of services. There are still differences between the provinces, as the GDP of the new regions is heavily dependent on the service sector, while in Ostrobothnia processing still accounts for a large part of production.
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