In the second quarter, GDP contracted a seasonally adjusted 1.1% over the previous three-month period, according to data released by the statistical institute on 5 September. The reading came in a notch below the preliminary estimate of a 1.0% contraction and represents the sharpest decline since the first quarter of 2009. Compared to the same period last year, the economy increased a paltry 0.1% in working-day adjusted terms, which came in well below the 1.8% increase observed in the previous quarter. The deterioration in the second quarter was broad-based. Total consumption swung from a 1.4% increase in Q1 to a 1.9% contraction in Q2, mostly as a result of a 2.2% decline in private consumption (Q1: +1.7% quarter-on-quarter), which represents the worst outturn in over 12 years. Government consumption also decreased, albeit by a more moderate 0.8%, which, nonetheless, contrasted the 0.4% rise seen in the first quarter. Moreover, fixed investment stepped down from a 0.5% contraction in the first quarter to a 0.7% decline in the second. On the external sector, exports swung from a 0.5% expansion in the first quarter to a 2.3% contraction in the second quarter. Imports followed suit and contracted 3.6% in the second quarter, which came in below the 1.1% decline recorded in preceding three-month period. The Central Bank expects the overall economy to grow 1.5% this year before slowing down to a 1.2% expansion next year
Growth plummets in second quarter
September 5, 2012
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Finland GDP Chart
Note: Quarter-on-quarter changes of seasonally adjusted GDP in %.
Source: Statistics Finland and FocusEconomics calculations.
Finland Economic News
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