The war in the Middle East is unlikely to severely impact the global economy unless it becomes protracted or oil prices rise significantly from current levels. However, uncertainty is high, which in itself negatively affects both business leader and consumer confidence. At the same time, inflation is rising, and there are prospects for higher interest rates in many regions.
The Nordic countries have so far not been hit hard by the conflict in the Middle East. None of the countries has significant trade with the region, and the economies are among the most energy-efficient in the world, with a significant share of consumption in all countries coming from renewable energy sources. This gives the Nordic countries a competitive advantage in times of rising oil prices, says Helge Pedersen, Nordea Group Chief Economist.
The Danish economy stands on a solid foundation with strong public finances and high employment. Geopolitical turmoil will likely lead to lower economic growth and higher inflation than previously expected, although both remain at relatively favourable levels. Consumption is expected to drive activity forward.
The Finnish economy has returned to broad-based growth, with both private consumption and industrial output picking up. This growth is beginning to support the labour market and public finances. However, higher energy prices and rising interest rates in the wake of the Middle East crisis will likely dampen economic activity later in the year.
Norway's economy shows resilience to the Middle East conflict, although higher interest rates weigh on the outlook. Persistent above-target inflation, fuelled by higher oil and commodity prices, will likely prompt further tightening from Norges Bank. Unemployment remains low, and the krone continues to strengthen.
Sweden is well-positioned to withstand challenges from the Middle East war, with conditions in place for healthy growth. Rising international demand will support exports while the labour market continues to improve. Low inflationary pressure at the outset gives the Riksbank room to wait and see this year.
Real GDP, % y/y, May 2026 | ||||
|
| 2024 | 2025E | 2026E | 2027E |
| World | 3.4 | 3.5 | 3.1 | 3.3 |
| Denmark | 3.5 | 2.9 | 2.1 | 1.9 |
| Finland | 0.4 | 0.2 | 1.0 | 1.5 |
| Norway (mainland) | 0.6 | 1.8 | 1.5 | 1.3 |
| Sweden | 2.0 | 1.8 | 2.3 | 2.1 |
| Source: Nordea Markets |
|
|
|
|
Helge J. Pedersen, Group Chief Economist, Mob: +45 22697912
E-mail: helge.pedersen@nordea.com
Nordea is a leading Nordic financial services group and the preferred choice for millions of customers across the region. For more than 200 years, we have proudly served as a trusted financial partner for individuals, families and businesses - enabling dreams and aspirations for a greater good. Our vision is to be the best-performing financial services group in the Nordics, accelerating through our scale, people and technology. The Nordea share is listed on the Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq Stockholm exchanges.