Finland Economic Activity October 2020


Finland: Contraction in economic activity softens in October

December 15, 2020

Economic activity decreased 1.9% year-on-year in working-day adjusted terms in October, following the 2.1% contraction recorded in September (previously reported: -3.2% year-on-year). The reading marked the softest drop in activity since February.

October’s decline was largely driven by a softer fall in secondary production over the previous month, and a milder contraction in the services sector. However, the primary sector—including the agriculture, hunting, forestry and fishing subsectors—swung to a sharp contraction from an expansion the month prior.

On a seasonally-adjusted monthly basis, economic activity grew 0.3% in October, contrasting the 0.2% fall recorded in September. Meanwhile, the trend pointed downwards, with the annual average variation of economic activity coming in at minus 2.6% (September: -2.3%).

Looking ahead, restrictions to contain the second wave of infections will likely weigh on activity again in the final quarter of the year.

Reflecting on this, Pasi Kuoppamäki, chief economist for Finland’s branch at Danske Bank, noted:

“The fourth quarter has started with a negative tone, as the second wave has hit the service sector and kept corporate investment plans at bay. However, employment and several other short-term indicators are relatively solid. Lockdown is moderate enough to allow normal operations in factories, construction sites and, to a large extent, in retail trade and services. […]. In our view, the risks are balanced.”

FocusEconomics panelists forecast the economy to expand 2.7% in 2021, which is down 0.4 percentage points from last month’s forecast, and grow 2.3% in 2022.

Author:, Junior Economist

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Finland Economic Activity Chart

Finland GDP Monthly October 20 20 0

Note: Year-on-year and annual average variation of working-day adjusted Trend Indicator of Output (TIO) in %.
Source: Statistics Finland and FocusEconomics calculations

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