Domestic Demand in Finland
Finland - Domestic Demand
Economy records sharpest contraction since Q1 2015
GDP fell at a steeper rate of 0.9% on a seasonally-adjusted quarter-on-quarter basis in Q1 2020, coming in below the 0.6% contraction tallied in Q4 2019 and marking the second successive quarter of contracting activity. As such, Finland entered into a recession, with Q1’s reading marking the worst result since Q1 2013.
The external sector drove the downturn, subtracting 1.8% from the overall reading. Exports of goods and services shrank 7.4% in Q1, marking the sharpest contraction since Q1 2010 (Q4: +1.3% s.a. qoq), while imports of goods and services contracted 3.5% in Q1 (Q4: -1.9% s.a. qoq).
Domestically, private consumption held up relatively well in the quarter, falling at softer pace of 0.6% in Q1 compared to a 0.7% drop in Q4. Public consumption accelerated to a 1.0% increase in Q1(Q4: -1.0% s.a. qoq) on the back of governmental stimulus measures taken in the face of widespread pandemic-related disruption to business activity. Meanwhile, fixed investment fell 0.5% in the first quarter, contrasting the fourth quarter's 0.3% expansion.
On an annual basis, the economy contracted 1.1% in Q1, swinging from Q4's 0.5% growth. Q1’s reading marked the worst result since Q1 2013.
The economy is expected to contract markedly this year, driven by an acute downturn in domestic demand: Private consumption is set to remain constrained throughout 2020 as nervous consumers reign in discretionary spending, while heightened economic uncertainty places fixed investment on pause for the time being. Meanwhile, the rate of economic recovery in key markets is a major risk to the external sector, further clouding the outlook.
Our panelists see the economy contracting 6.6% in 2020, which is down 1.1 percentage points from last month’s forecast. In 2021, the panel projects that GDP will rise 4.1%.
Finland - Domestic Demand Data
|Domestic Demand (annual variation in %)||1.3||3.4||1.5||2.9||-0.3|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.03||3.70 %||Dec 30|
|Exchange Rate||8.78||-0.38 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
July 15, 2020
Economic activity dropped 5.5% year-on-year in working-day adjusted terms in May (April: -5.3% yoy).
July 14, 2020
Consumer prices rose 0.19% from the previous month in June, swinging from the 0.02% fall seen in May.
July 13, 2020
The current account deficit grew to EUR 0.6 billion in May, increasing from the EUR 0.2 billion shortfall recorded in April 2020 and contrasting the EUR 0.2 billion surplus clocked in May 2019. In the 12 months leading up to May, the current account balance logged a surplus of EUR 0.7 billion, more than halving April’s EUR 1.5 billion surfeit and marking only the second surplus recorded for a 12-month period since September 2011. The merchandise trade balance came in at a EUR 0.1 billion shortfall in May following the EUR 0.4 billion surplus recorded in April (May 2019: EUR 0.0).
June 16, 2020
Economic activity fell 7.9% year-on-year in working-day adjusted terms in April, worsening from March’s downwardly-revised 5.7% decrease (previously reported: -2.7% year-on-year) and marking the sharpest fall since November 2009. April’s downturn was driven by shrinking output in the services sector, which contracted at a markedly faster pace than in the month prior.
June 15, 2020
Consumer prices fell 0.02% in May over the last month, a softer drop than the 0.34% decline seen in April.