Helsinki: Finland's economic recovery is experiencing a slowdown as the ongoing conflict in Iran and the resulting rise in energy prices weigh heavily on growth, according to the country's central bank. The Bank of Finland announced on Tuesday that the Finnish economy, which had begun to recover in late 2025 with growth continuing into early 2026, is now facing weakened momentum due to recent US and Israeli military actions in Iran. According to Anadolu Agency, the central bank's revised forecast indicates that Finland's gross domestic product (GDP) is projected to grow by 0.6% this year, a decrease from the previous estimate of 0.8%. Growth is expected to accelerate to 1.4% in 2027 and 1.5% in 2028. However, the outlook remains uncertain, clouded by ongoing conflicts in the Middle East and Ukraine, as well as uncertainties in global trade linked to changes in US tariffs. Juuso Vanhala, the central bank's forecasting chief, stated in a press release that while the starting point for this year's growth was s lightly better than predicted in December, the increase in energy prices is hindering progress. He emphasized that the outlook could change rapidly given the current global uncertainty. The bank also noted that inflation, which had slowed last year, is expected to rise again due to the 'energy shock' linked to the Iran war. Inflation is forecast to reach 1.9% this year before easing slightly in 2027. Additionally, disruptions to fuel shipments in the Persian Gulf could drive energy prices higher, impacting food, industrial goods, and other products. Vanhala highlighted that the rising cost of energy would increase consumer prices this year, but the impact on the following year will depend significantly on the duration of the energy supply disruption. The central bank also forecasts that unemployment will stand at 10.2% this year, with a decline to 9.7% in 2027 and 9.2% in 2028. The bank concluded that the duration of the conflict and its impact on energy markets remain key sources of uncertainty.