Finland GDP Q4 2016


Finland: Economy slows in Q4

March 1, 2017

The Finnish economy stagnated in Q4 compared to the previous quarter in seasonally-adjusted terms, which contrasted Q3’s 0.6% expansion, according to preliminary data released by Statistics Finland on 1 March. In annual terms, GDP growth slowed to 1.3% (Q3: +1.9%). According to full year data released on 16 March, GDP growth was 1.4% in 2016 (2015: +0.3%).

The slowdown was mainly caused by total consumption swinging into contractionary territory. Government consumption fell deeper into contractionary territory, falling 0.6% (Q3: -0.1% quarter-on-quarter), while private consumption ground to a halt, growing just 0.1% (Q3: +0.4% qoq). Total consumption’s negative contribution offset a strong acceleration in fixed investment, which grew 3.0% qoq following 0.4% growth in Q3.

On the external front, the external sector’s net contribution fell back into negative territory, clipping 0.5 percentage points off growth (Q3: +0.2 percentage points). The fall was mostly driven by a pick-up in import growth (Q4: +1.9% qoq; Q3: -0.4% qoq), which was greater than the pickup in export growth (Q4: +0.6%; Q3: 0.0%).

The Bank of Finland expects the economy to expand 1.6% in 2017 and 1.5% in 2018. Finnish data has a tendency to be subject to significant revision. For 2017, FocusEconomics panelists see the economy expanding 1.2%, which is unchanged from last month’s projection. In 2018, the panel forecasts GDP to expand 1.3%.

Author:, Economist

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Finland GDP Chart

Finland GDP Q4 2016

Note: Quarter-on-quarter changes of seasonally-adjusted GDP in %.
Source: Statistics Finland and FocusEconomics Consensus Forecast.

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