Finland’s economy contracted the most since early 2020 in the third quarter as the Nordic economy suffers from a slump in key export industries and as higher borrowing costs are hurting consumers.

Gross domestic product contracted 0.9% in the quarter through September from the previous three-month period, when it increased a revised 0.4%, Statistics Finland said on Thursday, citing data adjusted for seasonal swings. The outcome matched a flash estimate earlier this month.

The export-driven Finnish economy is projected to enter a recession with full-year contraction in 2023, even after a mild bounce-back during the first half of the year. Demand for the country’s goods in key markets has weakened while output is also hurt by higher borrowing costs as the European Central Bank’s interest-rate hikes have quickly dented the economy where more than 95% of mortgages are tied to variable interest rates.

Forecasters including OP Group and Nordea Bank Abp see no change for the better next year either, with both forecasting stagnation. More optimistically, the OECD and the country’s finance ministry forecast a return to growth in 2024, spurred by a revival of global demand and domestic consumption as interest rates reach a peak and energy prices ease.

Read More: Finland Sees Economy Recovering From Stagnation Next Year

--With assistance from Joel Rinneby.