Operating environment

Half-year Financial Report 1–6/2023, 17 August 2023

The following outlook information is based on materials published by the Confederation of Finnish Industries EK and Statistics Finland.

The growth estimates for the world economy in 2023 have remained mostly unchanged. The rapid increase in interest rates has slowed down inflation but also growth expectations for the coming years. In addition, Russia’s war against Ukraine, among other things, continues to create uncertainties for economic development in Europe. The world economy in 2023 is estimated to grow at a rate of some 3.0 percent, but growth in the Euro area is expected to be only 0.9 percent.

The economic outlook for Finland has weakened further. Furthermore, expectations for the future development of the economy have decreased since the spring. The confidence indicator for the retail trade weakened in July 2023 and was clearly below the long-term average. Retail sales have grown only slightly compared to previous months, and sales expectations for the coming months have reversed to show a clear decline. Inventories have grown from the previous months’ levels. Consumer confidence is still below the average. Estimates of the current state of personal finances continue to be very weak. Expectations for the future of personal finances and for Finland’s economy continue to be at a fairly low level, but they are clearly stronger than during the same period a year ago. Estimates for inflation and expectations for its future development are nearly unchanged and continue to be at a high level.   

(Confederation of Finnish Industries EK: Business Tendency Survey, July 2023; Confidence Indicators, July 2023. Statistics Finland: Consumer Confidence, July 2023.)

The working-day-adjusted turnover of the Finnish retail trade grew by 0.8 percent in June compared to the previous year. The volume of sales was down by 3.3 percent. The cumulative working-day-adjusted turnover of the retail trade in the January-June period rose by 3.5 percent but the volume of sales decreased by 3.3 percent. (Statistics Finland: Turnover of Trade, retail trade flash estimate, June 2023.)