The latest business confidence reading for Finland, released on November 27, 2025, registered at -6. This figure falls short of the consensus estimate of -3 and worsens from October’s -4, according to the Sigmanomics database. The index remains below zero, signaling persistent pessimism among Finnish businesses. Historically, the index has fluctuated between -11 in May and a brief positive peak of 3 in September this year, reflecting volatile sentiment amid shifting economic conditions.

Drivers this month

• Manufacturing sector concerns amid supply chain disruptions
• Rising input costs and energy prices
• Weaker export demand from key European partners
• Lingering uncertainty from geopolitical tensions in Eastern Europe

Policy pulse

Monetary tightening by the European Central Bank (ECB) continues to weigh on business sentiment. The policy rate stands at 3.50%, up from 3.00% three months ago, aiming to curb inflation but increasing borrowing costs. Finland’s inflation rate remains elevated at 4.10% YoY, above the ECB’s 2% target, pressuring real incomes and investment plans.

Market lens

Following the release, the EUR/FI currency pair saw a modest depreciation of 0.15% within the first hour, reflecting cautious investor sentiment. Finnish equity indices, particularly in industrial sectors, also experienced slight downward pressure.

Core macroeconomic indicators provide context for the subdued business confidence. Finland’s GDP growth slowed to 0.30% QoQ in Q3 2025, down from 0.70% in Q2. Unemployment edged up slightly to 6.20%, signaling labor market softness. Consumer spending growth moderated to 1.10% YoY, constrained by inflation and cautious household sentiment.

Monetary Policy & Financial Conditions

The ECB’s restrictive stance has tightened financial conditions. Finnish 2-year government bond yields rose to 2.80%, up 40 basis points since August, reflecting higher risk premiums. Credit growth to businesses slowed to 2.50% YoY, indicating tighter lending standards.

Fiscal Policy & Government Budget

Finland’s government budget deficit widened slightly to 2.90% of GDP in Q3, driven by increased social spending and energy subsidies. Fiscal space remains limited, constraining stimulus options. The government plans moderate tax adjustments in 2026 to support investment without exacerbating deficits.

Sectoral breakdowns reveal manufacturing and services sectors driving the decline, while construction remains relatively stable. Export-oriented firms cite weaker demand from Germany and Sweden as key headwinds. Domestic-oriented businesses face cost pressures from energy and wage inflation.

Market lens

Immediate reaction: OMX Helsinki 25 index dropped 0.40% post-release. Investors reacted to the weaker-than-expected confidence print by reducing exposure to cyclical stocks. The Finnish krona weakened slightly against the euro, reflecting increased risk aversion.

Looking ahead, Finland’s business confidence trajectory depends on several factors. The baseline scenario (60% probability) anticipates gradual stabilization as inflation moderates and supply chains improve, supporting modest growth of 1.00% in 2026. The bullish scenario (20%) envisions stronger export recovery and easing energy costs, pushing confidence into positive territory and GDP growth above 1.50%. Conversely, the bearish scenario (20%) assumes prolonged geopolitical tensions and tighter financial conditions, deepening pessimism and risking a mild recession.

Structural & Long-Run Trends

Long-term challenges include demographic shifts, digital transformation, and climate transition costs. Finland’s aging population pressures labor supply, while investments in green technologies offer growth opportunities. Business confidence will increasingly hinge on firms’ adaptability to these structural changes.

External Shocks & Geopolitical Risks

Ongoing instability in Eastern Europe and global trade uncertainties remain key downside risks. Energy price volatility and potential supply disruptions could further dampen sentiment. Conversely, improved EU-wide coordination on climate and innovation policies may bolster confidence.

In summary, Finland’s November business confidence reading of -6 signals a cautious economic outlook amid tightening monetary policy and external headwinds. While the index remains negative, the volatility this year underscores the economy’s sensitivity to global and domestic shocks. Policymakers face a delicate balance between controlling inflation and supporting growth. Businesses should prepare for continued uncertainty but also explore opportunities in structural transformation and green investments.

Since 2020, Finland’s Business Confidence index and the OMXH25 index have exhibited a positive correlation of approximately 0.65. Periods of rising confidence, such as mid-2021 and early 2023, coincided with strong equity gains. Conversely, dips in confidence during the pandemic and mid-2025 aligned with market pullbacks. This relationship underscores the index’s value as a leading indicator for Finnish equity performance.

Finland’s business confidence decline in November highlights ongoing economic challenges but also points to potential stabilization if inflation eases and external conditions improve.