Brexit brings economic uncertainty – Finland worst hit in the long run – Hufvudstadsbladet

According to Nordea's chief economist Aki Kancharjo The economic consequences are not as great as expected for Finland. The economic impact of Brexit is most visible in Finland through the indirect consequences on trade and investment.

– The markets reacted strongly on Friday, but in the afternoon they started to recover. We will only be able to see the long-term effects of this decision in the fall. It is now up to companies, and above all European companies, to decide what will happen next and then we will see how it will affect the real economy, says Aki Kangacharjo.

Director of Danske Capital in Finland Thomas Virtala Comments that markets reacted so strongly because prices were set earlier this week in line with the UK remaining in the EU.

The Bank of England and the European Central Bank’s decision to support banks’ liquidity when needed has helped cushion the shock to financial markets. It remains to be seen whether other central banks will take similar action.

“We are not facing a global economic crisis, but a weak and uncertain interim period,” says Thomas Virtala, adding that now you have to see how much interest rates fall, how central banks react and how negotiations to leave the European Union begin. Great Britain.

Nordea's Aki Kangacharjo believes that Brexit could also have an impact on the euro exchange rate in the long run and that Brexit could lead to the euro appreciating more slowly than it would have otherwise.

– Since Finland is an export-dependent country, a weaker euro could be positive for Finnish exports, for example to the USA.

On the other hand, in Företagarna i Finland they are more critical about the impact of Brexit on the Finnish economy.

– Brexit clearly weakens Finland's economic prospects. The negative consequences are compounded by the fact that Finland is a country that is highly dependent on exports. Brexit will inevitably push the UK economy into a downward spiral, which is a severe blow for export-dependent Finland. The decision also underscores Finland's need to rejuvenate its economy and implement a policy in which we look after Finland's competitiveness in all situations, says the head of Entrepreneur Finland. Mikael Pentikainen.