Finland: Growth picks up amid stronger external demand
March 1, 2011
In the fourth quarter, GDP increased a seasonally adjusted 1.7% over the previous quarter, which represented an improvement compared to the third quarter's 0.4% expansion. As a result of the robust reading, the economy grew 3.1% in the full year 2010, following on a severe 8.2% contraction in 2009. The acceleration over the previous quarter was mostly fuelled by developments in the external sector. Exports increased a robust 6.6% (Q3: +0.1% qoq), while imports contracted 4.6% (Q3: +6.1% qoq). As a result, the net contribution from the external sector to overall growth improved significantly, rising from minus 2.3 percentage points in the third quarter to plus 5.0 percentage points in the fourth. That said, the domestic sector also showed signs of improvement. Domestic demand growth of 0.5% over the previous quarter (Q3: +0.4% qoq) was mostly driven by an increase in private consumption, which expanded 1.0% (Q3: +0.8% qoq). Government spending also inched up to a 0.5% increase (Q3: +0.4% qoq). Only investment slowed, moderating the pace of expansion from a 2.7% increase in the third quarter to a 0.7% expansion in the fourth.