Finland: Economic growth rises in the first quarter of 2026
GDP gains momentum: Finland’s GDP increased 0.9% on a seasonally adjusted quarter-on-quarter basis in Q1, following a 0.3% expansion in the previous quarter. Q1’s reading was the strongest since Q3 2021 and contrasted the euro area’s 0.2% contraction.
On a calendar-adjusted year-on-year basis, GDP expanded 1.2% in Q1, following 0.5% growth in the prior quarter.
A broad-based pickup: Compared to the prior quarter’s data, figures in Q1 improved for private consumption (+0.9% on a seasonally adjusted quarter-on-quarter basis vs +0.2% in Q4), government consumption (+0.2% vs -0.6% in Q4), fixed investment (+6.5% vs +2.0% in Q4), exports of goods and services (+3.2% vs -3.3% in Q4) and imports of goods and services (+2.2% vs -0.9% in Q4).
Within investment, public investment led the expansion with a 30.8% surge, driven by defense expenditure. Private consumption grew particularly in goods, while services consumption remained flat compared to the previous quarter.
GDP to flatline in Q2 before rising thereafter: Our Consensus is for GDP to broadly flatline in Q2 2026. GDP should resume growth in the second half of 2026, albeit very modestly. Growth will be supported by defense spending thanks to further aircraft deliveries, though higher inflation in light of the Middle East conflict will weigh on consumer confidence.