Nordea Economic Outlook: The Balancing Act

Global growth is weak at the moment. However, there are signs that the year 2023 could also cause positive surprises as mild weather has eased the energy crisis in Europe and China will rebound after the end of the tight covid policy. Although inflation seems to have peaked, it is still an open question how much further monetary policy tightening is needed to lower it substantially. The central banks are thus facing a delicate balancing act, with many years of ultra-accommodative monetary policy suddenly being turned upside down, says Helge Pedersen, Nordea Group Chief Economist.

This is also the case in the Nordic countries where housing markets face a sharp slowdown on the background of sharply increasing interest rates. This comes however after seeing exorbitant price increases during the pandemic and can as such be perceived as a correction from unsustainable high price levels. Also weaker purchasing power will dampen economic activity throughout the year. However as labour markets are still strong and inflation is like to decline substantially over 2023 the economies are expected to recover by the end of the year, while the upswing in 2024 most likely will be modest.

After several years of high activity, the Danish economy is entering a new phase. Domestic demand is expected to weaken significantly which together with lower foreign demand will lead to an overall decline in economic activity in 2023. Towards year-end, however, economic activity is expected to rebound again.

The Finnish economic outlook for this year is quite mixed. Consumer and corporate confidence is bleak. On the other hand, inflationary pressures are easing and wages rising, which will provide relief for household finances towards the end of the year.  

Weaker purchasing power will dampen consumer spending, and unemployment may rise from a very low level. But we expect Norway to fare better than many other countries, in part due to sharply higher activity in the petroleum sector. 

After many years of debt build-up, the resulting vulnerability is now being tested and will contribute to a decline in the Swedish economy this year. Much suggests that 2023 will be a lost year, and expect a weak recovery in 2024.

Read Economic Outlook here (

GDP growth forecast, % year-on-year

2020 2021 2022E 2023E 2024E
World -3.0 6.0 3.4 3.2 2.7
Nordics -2.4 4.4 3.0 -0.5 0.9
Denmark -2.0 4.9 3.0 -0.5 1.0
Finland -2.4 3.0 2.0 0.0 1.0
Norway -2.8 4.1 3.8 1.0 1.0
Sweden -2.4 4.9 2.9 -1.8 0.8
Source: Nordea Markets

For further information:

Helge J. Pedersen, Group Chief Economist, Tel: +45 55471532 | Mob: +45 22697912

We are a universal bank with a 200-year history of supporting and growing the Nordic economies - enabling dreams and aspirations for a greater good. Every day, we work to support our customers' financial development, delivering best-in-class omnichannel customer experiences and driving sustainable change. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges. Read more about us at

Source: Cision

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