Finland skyline

Finland GDP Q2 2021

Finland: GDP growth accelerates in Q2; economy returns to pre-pandemic levels

Economic growth accelerated in the second quarter, with GDP increasing 2.1% on a seasonally-adjusted quarter-on-quarter basis, slightly above the preliminary estimate of a 2.0% expansion (Q1: +0.1% s.a. qoq). The upturn was partly thanks to the easing of Covid-19 restrictions. On an annual basis, economic growth accelerated to 7.7% in Q2, contrasting the previous quarter’s 2.0% fall, and thus the economy returned to pre-pandemic levels. Q2’s annual reading marked the best result since Q4 1997, although it was flattered by a favorable base effect.

Domestically, the quarterly result was driven by private consumption, which grew 1.9% in seasonally-adjusted quarter-on-quarter terms in Q2 following a 0.2% contraction in Q1. The result was likely bolstered by higher employment levels in the quarter, coupled with increasing nominal wages and salaries, which contributed to consumers turning optimistic. Moreover, fixed investment growth sped up to 1.3% in Q2 from 0.1% in the prior quarter. Government spending, meanwhile, grew 0.7% in the period (Q1: -0.2% s.a. qoq).

Turning to the external sector, exports of goods and services bounced back, growing 0.3% in Q2 (Q1: -6.4% s.a. qoq). In addition, imports of goods and services rebounded, growing 1.5% (Q1: -0.2% s.a. qoq). Consequently, the external sector subtracted 0.4 percentage points from the overall result, easing from Q1’s 0.5 percentage-point detraction.

Reflecting on the second quarter’s result and on the outlook for the remainder of the year, Sonja Liukkonen, economist at Swedbank, noted:

“Finland’s output grew 2.1% from the previous quarter in the second quarter of 2021. Similar to other Nordic countries, overall production has now hit pre-crisis levels. […] Growth was fastest in private consumption […]. However, [it] is still below its pre-pandemic level. […] The economy is now moving in the right direction, and while the Delta mutation could affect the recovery going forward, confidence in the economy has remained mostly upbeat.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest