Company borrowing anaemic

In February, Finnish companies took out loans worth just one billion euros.

The Bank of Finland published new financial institution balance sheet data on Tuesday 2 April. They showed that Finnish companies had taken out new loans worth approximately just one billion euros. That is a decrease of €450 million on the same month two years ago.

“The average interest rate on new business loans dropped a little from January, but was still 5.37%. The poor availability of funding will starve growth potential more day on day, as companies will not invest,” says Petri Malinen, an economist at Suomen Yrittäjät.

Malinen says that getting the Finnish economy to grow requires of Finnish companies a willingness to invest and create work.

“It’s imperative that in the upcoming budgetary framework discussions, when the Finnish economy is put right, actions are also taken to encourage companies to invest,” Malinen says.

Big drop in mortgages

In February 2024, the total value of new mortgages was €350 million. This was almost €450 million less than in January 2024 and 11.5% less than the same month last year.

“Customers’ confidence has not improved, nor have their fears on the worsening of their own finances eased, even though inflation has slowed down and purchasing power has increased,” Malinen says.

The average interest rate on new mortgages rose from January to 4.73% in February.

“It’s clear that the situation is not going to get easier before the summer, when the European Central Bank might start reducing interest rates. Only that will ease consumers’ fears and give them the confidence to buy or sell property,” Malinen says.

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