The global economy has seen some stabilization in recent months, according to Nordea Bank's latest Economic Outlook. The improvement is attributed in part to new trade agreements and fiscal measures in the United States. Despite this, economic growth remains weak in many countries, with ongoing caution from both consumers and businesses. Central banks have largely ended their cycles of interest rate cuts and are expected to maintain current policies.
Helge Pedersen, Nordea Group Chief Economist, stated: "The Nordic economies remain resilient amid global headwinds, supported by solid foundations. With the exception of Finland, the countries belong to the exclusive group of AAA-rated nations, characterised by robust public finances and solid external balance sheet surpluses. Despite downward adjustments to 2025 growth forecasts for Denmark, Finland and Sweden due to various factors, the outlook remains cautiously optimistic."
For Denmark, Nordea has lowered its growth expectations. This adjustment follows revisions of past growth figures and a decrease in industrial output, including pharmaceuticals. However, the Danish economy continues to show strength through low unemployment rates, a large public budget surplus, and minimal public debt.
Finland’s recovery is slower than anticipated despite better underlying conditions such as lower interest rates and easing inflation that increase purchasing power. Weak confidence among consumers and investors continues to hold back spending and investment. While manufacturing activity is beginning to recover, construction lags behind.
Norway stands out for its strong economic performance amid international uncertainty. Growth is being driven by increased household purchasing power. The country’s economic expansion is expected to continue at or above trend levels with persistently low unemployment. Wage increases remain high and inflation exceeds the central bank’s 2% target, limiting possibilities for further rate reductions.
Sweden faces slower growth because of global instability but shows signs of improvement as household confidence strengthens—a development expected to support higher spending levels. Swedish exports benefit from more stable international trade arrangements while stronger domestic conditions lessen the need for additional monetary policy stimulus.