Finland Economic Forecast

Finland Economic Outlook

June 30, 2020

The economy looks set to be hit hard in the second quarter, having slipped into technical recession following an external sector-led downturn in the first quarter. Economic activity collapsed at an over-decade fast pace in April amid tumbling industrial output and a struggling external sector—exports shrank for the fourth month in a row in April. Furthermore, slackening retail sales in the same month and deeply pessimistic consumer sentiment during April–May signal a contraction in private consumption in the second quarter. However, green shoots are appearing amid the gloom, with the easing of restrictions taking place in advance of most regional peers and the government announcing further recovery funds in early June. High-frequency data showed an uptick in work and leisure activities in recent weeks boding well for a robust albeit slow recovery in activity at the tail end of Q2.

Finland Economic Growth

This year, activity is set to shrink markedly as domestic demand contracts on reduced private consumption and faltering fixed investment amid heightened uncertainty. Continued government spending should soften the downturn, however. The slow pace of recovery in key international markets is a key downside risk to the outlook. FocusEconomics panelists project GDP to contract 6.5% in 2020, which is up 0.1 percentage points from last month’s forecast, and grow 3.7% in 2021.

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Finland Facts

Value Change Date
Bond Yield0.033.70 %Dec 30
Exchange Rate8.78-0.38 %Jan 01

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Finland Economic News

  • Finland: Consumer prices rise in June

    July 14, 2020

    Consumer prices rose 0.19% from the previous month in June, swinging from the 0.02% fall seen in May.

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  • Finland: Current account deficit widens in May

    July 13, 2020

    The current account deficit grew to EUR 0.6 billion in May, increasing from the EUR 0.2 billion shortfall recorded in April 2020 and contrasting the EUR 0.2 billion surplus clocked in May 2019. In the 12 months leading up to May, the current account balance logged a surplus of EUR 0.7 billion, more than halving April’s EUR 1.5 billion surfeit and marking only the second surplus recorded for a 12-month period since September 2011. The merchandise trade balance came in at a EUR 0.1 billion shortfall in May following the EUR 0.4 billion surplus recorded in April (May 2019: EUR 0.0).

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  • Finland: Economic activity drops at sharpest rate in over a decade in April

    June 16, 2020

    Economic activity fell 7.9% year-on-year in working-day adjusted terms in April, worsening from March’s downwardly-revised 5.7% decrease (previously reported: -2.7% year-on-year) and marking the sharpest fall since November 2009. April’s downturn was driven by shrinking output in the services sector, which contracted at a markedly faster pace than in the month prior.

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  • Finland: Consumer prices decline at more moderate pace in May

    June 15, 2020

    Consumer prices fell 0.02% in May over the last month, a softer drop than the 0.34% decline seen in April.

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  • Finland: Current account deficit reduces in April

    June 12, 2020

    The current account deficit slimmed to EUR 0.3 billion in April, down markedly from the EUR 1.2 billion shortfall recorded in March 2020 and the EUR 4.6 billion deficit lodged in April 2019. In the 12 months leading up to April, the current account balance logged a surplus of EUR 0.9 billion, up sharply from March’s EUR 3.3 billion deficit and marking the first surplus recorded for a 12-month period since September 2011. The merchandise trade balance came in at a EUR 0.3 billion surplus in April following the EUR 0.2 billion surplus recorded in March (April 2019: EUR 0.3 billion deficit).

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