Falling oil prices (New York Mercantile Exchange: @CL.1) and deflation are weighing on the once-rock solid economies of Norway and Sweden, while Finland has been hit by the recession in Russia, Danske Bank has warned.
"The Nordic countries have been looking strong in recent years, with economic and financial crisis in much of Europe... However, after years of robust growth, the shine seems to be wearing a bit off," said economists led by Steen Bocian in a report from the Scandinavian bank out Thursday.
Norway and Sweden outperformed the rest of Europe in 2013, posting economic growth of 0.7 percent and 1.3 percent respectively, versus a European Union (EU) average of no growth.
The two countries' relative strength has waned in recent months, however. Norway (which is not part of the EU) posted growth of 0.5 percent quarter-on-quarter between July and September 2014, just above the EU average of 0.3 percent, which Sweden matched.
"This does not mean that there are signs of economic crisis in the two otherwise very strong economies, but growth rates are heading towards the European average and downside risks have increased," said Bocian.
As Europe's biggest oil exporter, falling oil prices are weighing on Norway, although its reserves are bolstered by a sizeable sovereign wealth fund.
The Norwegian krone (Exchange: NOK=), whose performance is strongly tied to oil prices, has steadily weakened against the U.S. dollar since mid-August last year, and is down around 2.5 percent since the start of 2015-providing a possible spur to exports.
In December, Norway's central bank cut interest rates in an attempt to deflect the hit from falling offshore investments, lower oil prices and weak growth in Europe.
Read More Tumbling oil prices, slowdown see Norway cut rates
"Activity in the petroleum industry is softening and the sharp fall in oil prices is likely to amplify this tendency," the bank said in a statement. "This will have spillover effects on the wider economy and unemployment may edge up ahead."
Sweden is less susceptible to oil price movements, but growth slowed in 2014 as the country struggled with deflation-CPI inflation fell by 0.2 percent in November on the corresponding period the year before-and an overpriced housing market.
Bocian and colleagues forecast that growth would remain a challenge for the country in 2015.
"To reduce the risks linked to the increasing household debt , Sweden has introduced stricter rules for amortisation, which will increase savings and thereby reduce the strength of domestic demand - the main engine in the Swedish economy in recent years," he said.