Domestic Demand in Finland
Finland - Domestic Demand
Economic growth ticks up in Q3 after a good start to 2018
Economic growth accelerated in the third quarter of 2018 compared to the second quarter. According to GDP data released by Statistics Finland, the economy grew 0.4% in seasonally-adjusted quarter-on-quarter terms in Q3, up slightly from Q2’s 0.3%. In year-on-year terms and adjusted for working days, the expansion inched up to 2.4% in Q3 from a revised 2.3% in Q2 (previously reported: +2.2% year-on-year).
Higher quarter-on-quarter growth in Q3 was primarily underpinned by stronger government consumption, which rose 0.3% in the quarter compared to Q2’s flat growth. On the other hand, private consumption dragged on the overall expansion as it fell 0.5%, contrasting 0.6% growth in Q2. Lower private spending came amid a drop in consumer confidence and despite a small decrease in the unemployment rate. Furthermore, fixed investment contracted even more sharply in the quarter (Q3: -1.4%; Q2: -0.2%).
Exports of goods and services decreased 1.8% in Q3 from the previous quarter, representing a deterioration compared to the 1.2% fall in Q2. Imports, however, increased 0.5% in the third quarter, contrasting the 0.2% decrease in Q2. Overall, the external sector detracted 1.0 percentage points from economic growth in Q3, more than the 0.4 percentage-point deduction in Q2.
Going forward, private consumption should have a spring in its step next year thanks to a strengthening labor market. Government consumption, for its part, is unlikely to expand quickly considering the tight budget proposed by the center-right administration of Prime Minister Juha Sipilä. In addition, historically-loose monetary policy should continue to boost the economy by feeding into fixed investment growth next year, as should high business confidence. Meanwhile, exports ought to continue to benefit from increased international competitiveness on the back of Finland’s 2016 Competitiveness Pact.
The Bank of Finland expects the economy to expand 1.7% in 2019. FocusEconomics panelists see the economy expanding 2.1% in 2019, which is unchanged from last month’s forecast. In 2020, the panel project that GDP will expand 1.8%.
Finland - Domestic Demand Data
|Domestic Demand (annual variation in %)||-1.1||-0.1||1.3||2.8||2.1|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.57||3.70 %||Dec 11|
|Exchange Rate||8.57||-0.38 %||Dec 12|
|Stock Market||3,835||0.0 %||Dec 12|
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December 14, 2018
Consumer prices were stable in November, contrasting the 0.2% rise in October.
Finland: Finland logs another current account deficit in October, after a substantial revision to historical data
December 14, 2018
The current account balance was minus EUR 0.17 billion in October, deteriorating from the EUR 0.36 billion deficit in September (previously reported: surplus of EUR 0.10 billion).
November 30, 2018
Economic growth accelerated in the third quarter of 2018 compared to the second quarter.
November 14, 2018
Economic activity grew a working-day adjusted 3.2% in September compared to the same month last year, up from the revised 2.6% expansion in August (previously reported: +2.3% year-on-year). The economy was driven by a more upbeat sector-by-sector performance.
November 14, 2018
Consumer prices rose 0.2% in October, down from the 0.3% increase in September.