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Finland Economic Activity December 2022

Finland: Monthly economic activity expands at quickest pace since March in December

Economic activity grew 0.6% in month-on-month seasonally adjusted terms in December, which was above November’s 0.1% increase. December’s result marked the best reading since March. The pickup was broad-based: Activity in the secondary and services sectors gained steam, while production in the primary sector—which includes the agriculture, hunting, forestry and fishing subsectors—contracted at a softer rate.

On an annual basis, economic activity rose 0.2% in December, which was below November’s 0.4% expansion. Moreover, the trend pointed down, with annual average growth of economic activity coming in at 1.9%, down from November’s 2.2%.

Meanwhile, GDP shrank 0.2% in seasonally adjusted quarter-on-quarter terms in Q4, according to early estimates. Q4’s deterioration pushed the economy into a shallow recession, likely on the back of deeply entrenched consumer pessimism, higher inflation and tighter financing conditions.

Commenting on the outlook, analysts at the EIU commented:

“We forecast that real GDP growth will slow to 0.2% in 2023. […] We expect private consumption growth to slow to 0.2% in 2023 as households tighten spending amid the cost-of-living crisis. Additional pressures include slowing job creation and persistent inflation, as consumers remain cautious about the economic and labour-market outlook. The outlook for private business investment has weakened in 2023-24, given rising uncertainty about domestic and external demand, weakening pricing power and elevated input costs.”

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