Finland: GDP registers flat growth in Q3
December 5, 2013
In the third quarter, GDP growth was flat over the previous quarter in seasonally-adjusted terms, according to data released by Statistics Finland on 5 December. The figure was slightly down from the 0.1% expansion seen in the second quarter and fell short of market expectations of a 0.4% expansion.
The flat reading mainly reflected that an improvement in domestic demand - mostly in private consumption - offset a sharp deterioration in the external sector. Total consumption contracted 0.2% quarter-on-quarter (Q2: -0.4% quarter-on-quarter). Private consumption registered the largest improvement, expanding 0.1% (Q2: -0.6% qoq). Public consumption deteriorated to a 1.3% contraction in Q3, after having expanded 0.1% in Q2. Fixed investment registered the sharpest contraction on the domestic side, contracting 2.7% in Q3 (Q2: -0.4% qoq), which marked the lowest reading in four years.
On the external front, exports expanded 1.5% in Q3 (Q2: -1.0% qoq) and imports soared to a 5.1% expansion in the third quarter, which contrasted the 1.2% contraction tallied in Q2. As a consequence, the external sector's contribution to GDP growth fell from a zero contribution in Q2 to minus 1.3 percentage points in Q3; the lowest level since Q4 2011.
Annually, GDP contracted 1.0% over the same quarter last year in seasonally and working-day adjusted terms, which was just slightly down from the 0.9% contraction tallied in Q2.
The Central Bank expects the overall economy to contract 0.8% this year, before accelerating to a 0.7% expansion next year. FocusEconomics Consensus Forecast panelists expect GDP to contract 0.7% this year, which is down 0.2 percentage points from last month's projection. For 2014, the panel sees GDP expanding 1.3%, which is unchanged over the last month's estimate.