The Finns’ macroeconomic outlook has declined rapidly to its lowest point in two years. The Finns are now Europe’s most depressed fund selectors by a distance, with just one in five looking positively to the wider macroeconomic prospects. This contrasts with the Pan-European average of 59%.
The European sanctions against Russia, which Finnish foreign minister Erkki Tuomioja initially refused to support in an eventually unsuccessful Finlandisation attempt, and the subsequent Russian countersanctions have brought the Finnish economy into recession. They also hit fund selectors’ investment portfolios to such an extent, that almost one in three are not anymore invested in Russian equities, an asset class which is normally widely used in Finland. On top of that, more than three quarters of delegates said the conflict with Russia has had a significant impact on their portfolios.
Another factor contributing to the pessimistic mood is a collective fear of deflation. Though fund selectors across Europe believe deflation is a bigger threat than inflation at the moment, Finland is the only country in Europe with unanimous agreement that deflation is to be feared more than deflation.
To make matters worse, fund selectors showed no confidence in their government’s ability to overcome the country’s economic woes. An overwhelming 85% of the audience said they don’t think the five-party coalition currently governing Finland is competent to manage the economy.
Click here to see a slideshow of photos taken during Expert Investor Finland.
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