Finland skyline

Finland GDP Q4 2018

Finland: The economy accelerates in Q4, ending modest year on a strong note

The economy grew 0.7% in seasonally-adjusted quarter-on-quarter terms in Q4 2018, up from Q3’s 0.4%. In year-on-year working-day adjusted terms, the economy expanded 2.2% in Q4, up slightly from 2.1% in Q3. However, for the whole year, growth cooled to 2.2% in 2018, down from 2.7% in 2017.

Higher quarter-on-quarter growth in Q4 was underpinned by a swing in private consumption, which rose 0.9% after contracting 0.3% in Q3, and a turnaround in fixed investment, which increased 1.9% after decreasing 0.9% in Q3. On the other hand, government consumption decreased 0.9%, contrasting the 0.2% growth in Q3. Looking beyond these numbers, private consumption was likely boosted by a tightening labor market in Q4, as the unemployment rate in December fell to the lowest level since November 2008. Fixed investment was likely supported in Q4 by the continued low-interest-rate environment, although weakening business confidence suggests investment levels were below potential. Meanwhile, the fiscal straitjacket donned by the government ensured another subdued government consumption reading.

On the external front, exports of goods and services increased 3.3% in Q4, contrasting the 1.4% decrease in Q3. Imports, meanwhile, increased 4.1% in Q4, up from 0.7%. Overall, the external sector detracted 0.4 percentage points from economic growth in Q4, less than the 0.9 percentage-point deduction in Q3.

Going forward, private consumption should support economic growth in 2019 thanks to a strengthening labor market. In addition, historically-loose monetary policy should continue to boost the economy by feeding into private consumption and fixed investment growth. However, government consumption growth is likely to slow considering the tight budget set out by the center-right administration. In terms of exports, an economic slowdown in the Eurozone could undermine growth potential.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest