Many factors are likely to drive down retail sales, according to the Finnish Commerce Federation.
The turnover of the national retail sector will decrease by around 2.5% this year and even more in 2023, according to forecasts by the Finnish Trade Federation.
The trade lobby group said if Finland and the rest of Europe went into recession, there would still be further cuts in trade.
According to the group’s preliminary figures, retail sales fell by around 2.6% in the first half of the year and net sales in euros increased by 3.9%.
However, the group’s forecast has both positive and negative aspects, according to its chief economist, Jaana Kurjenoja.
Kurenoja listed several factors that could drag retail down even further. These include the possibility of a halt in economic growth in Europe, further weakening of the euro, continued Covid-related lockdowns in China, and the impact of the war in Ukraine on energy prices.
“[Such situations] would also reduce employment in commerce,” she said in a statement released on Wednesday.
Not all dark
Nevertheless, the economist pointed out that more optimistic results remain possible.
“Rising interest rates may remain more subdued than expected, commodity price increases have already slowed, and energy availability may be better than our worst fears,” Kurjenoja said.
The trade lobby group suggested that one of the biggest structural problems facing Finland was low purchasing power relative to labor costs, recommending that the country cut income taxes.
The group also proposed that the pharmacy sector should be reformed “to meet the needs of customers, not individual pharmacists”.
The CEO of the organization, Mari Kiviniemialso said that the dismantling of the state alcohol monopoly Alko should continue.
“The previous alcohol reform showed that increased competition benefits the consumer and does not pose a threat of collapse to society and public health,” Kiviniemi said.
Kiviniemi is a former Center Party politician who served as Finland’s second female prime minister from 2010 to 2011.