Supply chain limitations and labor shortages could stymie the region’s economic rebound, according to Danske Bank’s projections for next year’s growth in Scandinavia.
According to Danske’s Nordic Outlook study, “the shortage of supplies of materials and equipment is a restriction for many Scandinavian enterprises.” “We expect these limits to lessen as global demand returns to the service side, but the Omicron Covid-19 alternative has stalled the process even more.”
At the same time, the bank stated that robust domestic and international demand is fueling development in the Nordic economies and that growth will only moderate modestly if governments adopt further limitations to contain the omicron-caused rise in Covid episodes.
Danske now forecasts 3.8 percent GDP growth in 2021, up from 4.0 percent earlier; growth prediction for 2022 has been trimmed to 2.5 percent from 3.0 percent previously.
Growth will be 1.7 percent in 2023.
As the apparent recovery has practically depleted existing funds, wages are anticipated to rise, the constrained labor market will become “the prominent issue in the next years.”
Nonetheless, it is felt that “the general overheating of the Danish economy, similar to that which existed before the financial crisis, is still a long way off.”
Scheduled the prediction for GDP growth in 2021 has been boosted to 4.5 percent from 3.9 percent; the forecast for 2022 has been decreased to 3.0 percent from 3.5 percent.
Growth will be 2.2 percent in 2023.
Although the increase is greater than predicted, new Covid limits, persistent supply chain issues, and record-high electricity prices are all short-term roadblocks, according to Danske.
GDP increase is expected to reach 4.0 percent in 2021, up from 3.8 percent previously forecast; the prediction for 2022 has been trimmed to 3.8 percent from 4.0 percent.
Growth will be 2.0 percent in 2023.
High capacity utilization is thought to indicate that supply-side constraints are limiting expansion in several industries.
While the increase in infections and uncertainty surrounding the new omicron variety have curtailed mobility and imposed new limitations, the impact will be minimal because hospitality and culture account for only 3% of the GDP.
Danske forecasted 3.5 percent growth in Finland in 2021, up from 3.3 percent previously, and 2.8 percent growth in 2022, down from 3.0 percent previously.