Finland Merchandise Trade Balance (EUR bn)

The economy entered a shallow recession according to early estimates: Quarter-on-quarter GDP fell 0.2% in Q4, unchanged from Q3’s reading. Monthly economic activity registered negligible growth in October–December, improving only slightly from Q3’s small drop thanks to December’s rebound in the secondary and services sectors. Stronger sequential growth in merchandise exports likely prevented a deeper slump. Turning to Q1, the economy should be shrinking further on elevated interest rates and a subdued external demand. That said, risks are skewed to the upside: In January, consumer sentiment improved to an eight-month high, growth in consumer prices softened, and the unemployment rate ticked down, all boding well for household spending. On 17 February, Fitch Ratings affirmed Finland at ‘AA+’ with a stable outlook on strong governance indicators and a robust pension system.