Finland Economic Activity November 2020


Finland: Economic activity contracts at softest pace in ten months in November

January 15, 2021

Economic activity dropped 0.4% year-on-year in working-day adjusted terms in November, following the 1.8% fall recorded in October (previously reported: -1.9% year-on-year). The reading marked the smallest drop in activity since January.

November’s softer contraction was driven by solid growth in secondary production over the previous month. Moreover, both the primary sector—which includes the agriculture, hunting, forestry and fishing subsectors—and the services sectors fell at notably milder rates in November than in the prior month.

On a seasonally-adjusted monthly basis, economic activity grew 0.6% in November, following the 0.5% expansion clocked in October (previously reported: +0.4%). Meanwhile, the trend remained unchanged, with annual average variation of economic activity coming in at October’s minus 2.7% in November.

Looking ahead, despite the start of the vaccine rollout, restrictions to contain the spread of the virus will likely have weighed on activity in the final month of 2020 and into early this year.

Reflecting on the consequences of the restrictions, analysts at Danske Bank, noted:

“The second wave [of Covid-19] constitutes a strong headwind for the economy and the outlook for early 2021 is difficult. […] In our view, the first months of 2021 are likely to be difficult but we expect a gradual recovery to begin in spring and to gather strength in H2. We believe fiscal policy response and a rebound in global trade should boost the recovery. […] The growth path would take Finnish GDP close to potential output by the end of 2022.”

FocusEconomics panelists forecast the economy to expand 2.5% in 2021, which is down 0.2 percentage points from last month’s forecast, and grow 2.2% in 2022.

Author:, Junior Economist

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Finland Economic Activity Chart

Finland GDP Monthly November 20 20

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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