Deflation risk looms over Finland

Helsinki, Aug 15 (IANS) Latest Finnish economic statistics triggered warnings about a deflationary spiral.

The Friday figures from the Finnish National Centre for Statistics indicated a 0.4 percent decline of the GNP in April-June from the previous quarter and one percent decline from the same period in 2014, reported Xinhua.

In July, inflation in Finland remained negative for the seventh month in succession. Consumer prices declined 0.2 percent. The business media Taloussanomat described Finland as “hovering on the brink of deflation”.

Analysts warned against the spectre of a prolonged deflation. Chief economist Pasi Kuoppamaki of the Danske Bank said in a release that a moderate decline in prices supports households, but when continuing it can lead to a general downward spiral.

Economist Juhana Brotherus of the Hypo Group said deflation is beneficial in a short term, but detrimental later. “Zero level inflation will boost purchasing power for a while, but is painfully damaging if it continues longer,” he told the media.

Brotherus said a deflationary spiral would give a serious blow to the Finnish housing market. Brotherus saw “insufficient measures of the European Central Bank” as an underlying reason for the situation.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of or any employee thereof. is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here