Finland: GDP growth records best reading in a year in the second quarter
August 31, 2022
GDP growth improved to 1.0% on a seasonally-adjusted quarter-on-quarter basis in the second quarter, doubling 0.5% in the first quarter. Q2's reading marked the best result since Q2 2021.
Household spending growth came in at 2.3% in seasonally adjusted quarter-on-quarter terms in Q2 from Q1’s flat reading. Public spending edged up to a 1.5% increase in Q2 (Q1: +1.3% s.a. qoq). This more than offset a decline in fixed investment, which contracted 1.8% in Q2, contrasting the 2.5% expansion recorded in the previous quarter.
On the external front, exports of goods and services rebounded, growing 1.1% in Q2 (Q1: -10.0% s.a. qoq). In addition, imports of goods and services also bounced back, rising 3.3% in Q2 (Q1: -0.7% s.a. qoq).
On an annual basis, economic growth slowed to 3.3% in Q2, from the previous period's 4.2% increase.
On the outlook for the Finnish economy ahead, analysts at the EIU commented:
“We forecast that real GDP growth will slow to 1.8% in 2022 before slowing further to 0.6% in 2023. The post-pandemic recovery will be broad based. Construction investment and consumer spending will remain the drivers of growth in 2022. The risk of a decline in asset prices for the forecast period is modest but not insignificant. Russia's invasion of Ukraine has amplified macroeconomic risks for Finland in 2022, given that Russia is an important trading partner for Finland.”
Author: Magdalena Preshlenova , Junior Economist