HELSINKI, Sept. 3 (Xinhua) -- The Finnish economy is edging back toward growth, but uncertainty will delay a stronger recovery until 2026, Danske Bank said in its latest economic outlook published on Wednesday.

The bank forecast that Finland's gross domestic product (GDP) will grow by 0.9 percent in 2025 and 2.0 percent in 2026, noting that a more solid rebound is expected only in 2026 due to persistent uncertainty and high unemployment.

After several challenging years, growth in Finland is showing signs of recovery. Falling interest rates, low inflation and rising earnings are boosting household purchasing power. However, high unemployment continues to weigh on consumer confidence and demand, the bank said.

"Although Finland's economic growth has been slow and global trade uncertainty is not easing, we see Finland returning to growth ahead," said Kaisa Kivipelto, an economist for private finances at Danske Bank.

The bank expected industry and construction to gradually recover, while private consumption is set to turn to growth, particularly in the first half of next year.

Despite uncertainty surrounding tariffs and the ongoing trade dispute, industrial confidence has strengthened and more orders have been received. According to the bank, this indicates that companies are managing to adapt to the 15 percent tariff level agreed upon between the United States and the European Union. Still, the risk remains that the dispute could escalate, potentially weakening exports.

Danske Bank identified high unemployment as the biggest risk to the recovery of private consumption. The jobless rate remains above 9 percent, undermining confidence and spending.

Kivipelto said the labor market is nonetheless showing signs of improvement. "We expect the labor market to recover gradually, especially next year. This, together with rising real earnings, will slowly raise consumer confidence, supporting the recovery of private consumption," she noted.

Meanwhile, Nordea Bank issued a more pessimistic forecast for the Finnish economy, also on Wednesday. It cut its growth projection for this year from 1.0 percent to 0.5 percent, and for 2026 from 2.0 percent to 1.5 percent.

According to Statistics Finland, the country's GDP contracted by 0.4 percent in the second quarter of 2025 compared with the previous quarter, while working-day-adjusted GDP was unchanged year-on-year. ■