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The Pellervo Economic Research (PTT) on Thursday became the first to predict a renewed recession for Finland, forecasting a decline in GDP of 1.5 percent in 2012.
The main reason for the 'double-dip' downturn is the eurozone debt crisis, says the think-tank. It notes that delaying a resolution of the crisis will simply increase the costs.
PTT warns of a dramatic shift in the Finnish economy, from three percent growth this year to a 1.5 percent slump in 2012. That is much more pessimistic than the latest Finance Ministry prediction of 1.8 percent growth next year.
The organisation predicts that the abrupt dip will increase consumers' and companies' uncertainty about the future.
Joblessness back upAccording to its prognosis, the unemployment rate will leap from the current 6.6 percent back up to 8.3 percent, while the growth in real incomes will come to a halt.
The effects of the projected decline in exports will be somewhat mitigated by the weakening of the euro single currency, it says.
PTT was co-founded by the Central Union of Agricultural Producers and Forest Owners (MTK), which has close ties to the Centre Party.
YLE