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Economic Forum 2025 offered insights into the economies of Finland, Europe, and the world
During the two-hour forum, the audience heard fresh perspectives on the state of the economy, investment prospects, and housing markets from Olli Rehn, Governor of the Bank of Finland, and professors Juha-Pekka Junttila and Elias Oikarinen from the Oulu Business School.
Inflation and monetary policy amid crises
Governor Olli Rehn provided a comprehensive overview of the economic outlook for Europe and Finland in a world marked by crises. He highlighted that the stabilisation of euro area inflation towards the medium-term target of 2% and weakened economic growth prospects are evident in the European Central Bank’s notably eased monetary policy. Rehn emphasised that the direction of monetary policy remains clear.
Rehn noted that economic growth in both the euro area and Finland is expected to strengthen gradually but cautioned that geopolitical and trade-related risks—such as potential U.S. tariff increases on imports—could hinder growth and complicate Finland's export of goods. After Europe, the U.S. is Finland's second-largest export market, and the export of knowledge-intensive services, particularly IT services, to the U.S. has been growing rapidly. Rehn urged preparedness for such risks while maintaining composure.
– We must not throw up our hands or lose hope, as solutions can be found, Rehn reminded the audience.
Despite these risks, there are opportunities for faster-than-expected growth in the Finnish economy in the coming years, particularly through positive surprises in investments. Rehn stressed the importance of determined and sustainable measures to stabilise Finland’s public debt-to-GDP ratio while also advocating for policies that promote productivity growth, entrepreneurship, and sustainable economic development. Investments in human capital are essential for achieving these goals.
– Much depends on our own national decisions. But at the same time, we need significant collective European investments, particularly in strengthening cooperation in common security and the defence industry, Rehn concluded.
Investment prospects in Northern Finland
Professor Juha-Pekka Junttila, an expert in financial economics from the Oulu Business School, focused on the economic situation and key investment sectors in Northern Finland.
Junttila highlighted the unique characteristics and future potential of Northern Finland’s economy. Key sectors such as metal and forest industries, mining, and tourism and service industries must pay particular attention to sustainability issues and develop responsible operational models. Northern Finland could take a leading role in the emerging fields of sustainable tourism and nature tourism.
The region’s strengths include the utilisation of renewable energy, bioeconomy, and innovative businesses, which support its economic growth and development. These areas also offer significant growth potential. Future infrastructure projects, such as improvements to railways and roads, would further enhance Northern Finland’s logistics and connectivity, fostering additional investments.
Junttila concluded by emphasising the challenges posed by climate change, international competition, and trade policies, which must not be underestimated. Climate change, in particular, poses a major risk not only to the environment but also to the profitability of future investments and the overall functioning of the economy.
Recovery in the housing market
Professor Elias Oikarinen, an expert in economics at the Oulu Business School, focused on the housing market and its recovery in the aftermath of interest rate shocks. He highlighted key trends affecting the housing markets in Finland and the Oulu region in the coming years.
Oikarinen stated that, based on statistics, housing prices have bottomed out, and prices are expected to rise at the same time as consumer confidence in the economy improves. Rental levels are well aligned with economic fundamentals, and price increases could accelerate in the coming years if overall economic development supports them, and no unexpected negative shocks occur.
He noted the significant regional differences within the housing market. For example, in the Oulu area, housing price declines have been more moderate compared to other major cities, leaving less room for price increases. According to Oikarinen, this is partly due to Oulu’s housing supply adapting better to demand.
The development of Oulu’s housing market is supported by the average household income in the area, which has grown more than in other major Finnish cities throughout the 21st century. Future trends in housing prices and rental levels will depend largely on the success of the urban area and its ability to continue aligning housing supply with demand effectively.
Speakers' presentations:
Governor Olli Rehn’s speech and presentation (in Finnish)