Finland: Economy accelerates in Q1
June 1, 2017
The Finnish economy took off in Q1, after experiencing a slowdown in the final quarter of last year. According to the first estimate released by Statistics Finland on 1 June, GDP grew a seasonally-adjusted 1.2% over the previous quarter in Q1, up from Q4 2016’s 0.6% outturn. In annual terms, GDP growth accelerated to 3.6% (Q4: +1.6% year-on-year).
The acceleration was broad-based, pointing to a well-balanced recovery ahead. Private consumption accelerated to 1.5% (Q4: +0.3%), despite the wage moderation agreement that came into effect at the beginning of the year and worsening labor market conditions. Growth seems to have been largely buoyed by rising consumer sentiment. Fixed investment also grew strongly (Q1: +3.9%; Q4: +1.0%), benefitting from the strong pull of improving global trade dynamics. Together these components offset a contraction in government consumption (Q1: -0.3%; Q4: +0.2%).
The external sector’s net contribution climbed back, adding 2.4 percentage points to growth (Q4: -0.6 percentage points). The impressive result was driven by a pick-up in export growth (Q1: +5.0%; Q4: +0.8%), while imports fell into contraction (Q1: -1.0%; Q4: +2.1%).
Author: Christopher Mc Innes, Economist