Finland GDP


GDP in Q3 sees largest contraction in almost three years

According to official data released by Statistics Finland on 4 December, the Finnish economy contracted a seasonally-adjusted 0.5% in Q3 2015 over the previous quarter, which represented the lowest reading since Q4 2012. The print contrasted the revised 0.4% expansion recorded in Q2 (previously reported: 0.2% quarter-on-quarter). In annual terms, GDP registered a 0.8% decrease in Q3 (Q2: +0.6% year-on-year).

The quarterly decrease was mainly due to a stark deterioration in the external sector, offsetting a mild expansion in domestic demand. Private consumption rose 0.8% over the previous quarter, up from the 0.1% increase that was tallied in Q2. Government spending inched down over the previous quarter (Q3 +0.1% qoq, Q2: +0.2% qoq). Fixed investment fell sharply, by 1.4% in Q3, a staunch deterioration from the 0.2% contraction recorded in Q2.

On the external front, exports contracted a seasonally-adjusted 0.7% in Q3, which was below the 0.5% decrease observed in Q2. Imports recorded a 1.8% increase in Q3, which marked a strong recovery and contrasted the 4.7% decrease seen in Q2. As a result, the external sector’s net contribution to GDP growth deteriorated from plus 1.7 percentage points in Q2 to minus 1.0 percentage points in Q3, the largest detraction since Q4 2011.

The Central Bank expects the economy to expand 1.2% in 2016 and to 1.3% in 2017. FocusEconomics Consensus Forecast panelists are less optimistic than the Central Bank in its forecast and expect the economy to expand 0.8% in 2016, which is unchanged from last month’s projection. For 2017, the panel sees GDP expanding 1.3%.

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Finland GDP Chart

Finland GDP Q3 2015

Note: Quarter-on-quarter changes of seasonally-adjusted GDP in %.
Source: Statistics Finland.

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