Middle East war will hit Finnish growth this year and next, central bank says

Finland's central bank lowered on Tuesday its economic growth forecasts for the country for this year and next, citing effects from the war in the Middle East.

Suomen Pankki said in a regular report it now sees GDP growth of 0.6% this year and of 1.4% in 2027. Its latest forecasts, from December, were for 0.8% and 1.7%, respectively. In 2025, growth was 0.2%.

"The forecast has been revised downwards because the rise in energy prices caused by the war in Iran is hampering growth," it said in a statement, adding that effects on inflation from the higher energy costs would depend on the duration of the energy supply disruptions resulting from the war.

"The outlook for growth is clouded especially by the high uncertainty about the war in Iran and the continuing war in Ukraine," it said.

-Reporting by Anna Ringstrom, editing by Louise Rasmussen/Reuters