Finland GDP


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.

The Central Bank expects the economy to contract 0.1% in 2015 and to expand 1.0% in 2016. FocusEconomics Consensus Forecast panelists are more optimistic than the Central Bank’s forecast and expect the economy to expand 0.6% in 2015, which is unchanged from last month’s projection. For 2016, the panel sees GDP expanding 1.3%.

Author: Teresa Kersting, Economist

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Finland GDP Chart

Finland GDP Q4 2014

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

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