Finland: GDP records largest drop in two years in Q4
March 2, 2015
According to official data released by Statistics Finland on 2 March, the Finnish economy declined a seasonally-adjusted 0.2% in Q4 over the previous quarter, which represented the largest contraction since Q4 2012. The print contrasted the revised 0.1% expansion recorded in Q3 (previously reported: +0.2% quarter-on-quarter) and came in slightly above the 0.3% drop reported in the 13 February flash estimate. In annual terms, GDP fell 0.2% (Q3: 0.0% year-on-year). In 2014, the economy fell 0.1%, which was above the 1.3% drop tallied in 2013.
The quarterly decline was mainly driven by shrinking exports and a deterioration in domestic demand. Private consumption declined 0.5% over the previous quarter, contrasting the 0.5% expansion that was tallied in Q3, while government spending accelerated to a 0.5% increase in Q4 (Q3: +0.3% qoq). Fixed investment deteriorated markedly in Q4, falling 2.6% on a quarterly basis (Q3: -0.9% qoq) and marking the sharpest decline since Q3 2009.
On the external front, exports fell a seasonally-adjusted 1.0% in Q4, which undershot the flat reading observed in Q3. Imports shrunk 0.8% in Q4, which followed Q3’s 2.1% drop. As a result, the external sector’s net contribution to GDP growth swung from plus 0.9 percentage points in Q3 to minus 0.1 percentage points in Q4.