The coronavirus crisis and the restrictive measures taken to prevent its spread had a stronger impact on the Finnish economy than previously estimated. Preliminary information Published by Statistics Finland.
Finland’s gross domestic product (GDP) contracted by 6.4 per cent from the corresponding period of the previous year in the second quarter of 2020 and also decreased by 4.5 per cent compared to the first quarter of the year.
Statistics Finland had previously estimated that the Finnish economy would contract by about five per cent year-on-year in April-June and by just over three per cent from the previous quarter.
“However, the decline is still much smaller than first feared in the spring,” Janne Huovari, Forecast Manager at Pellervo Economic Research, wrote on Twitter.
The story continues after the sound
Private consumption, exports fell sharply
Preliminary data show the exceptional nature of the current recession caused by the coronavirus crisis.
For example, private consumption tends to keep the Finnish economy afloat when the recession takes the export industry, but instead consumption fell by 11 per cent from the previous year. The volume of exports also fell sharply, by 12 per cent less than in the second quarter of 2019.
Exports of services in particular suffered the most, falling by as much as 28 per cent. Meanwhile, exports of goods fell by four per cent from last year.
“Above all, investment has kept Finland’s GDP decline relatively small. They dropped just over one percent,” Hoodie tweeted and added that the decline in investment was much greater in many other countries because restrictive measures have hurt the construction industry.
Based on this, Huovari predicted that the decrease in investments in Finland will affect the economy later.
Finland’s exports are facing a difficult autumn
Despite the latest preliminary figures, the Finnish economy appears to be rising from the source of the coronavirus less damaged than many other European countries.
In Germany, GDP fell by more than 11% year-on-year in the second quarter, and the decline in tourism in southern European countries has led to even sharper declines.
However, the beginning of autumn already seems difficult for the Finnish economy.
New orders in manufacturing fell by more than ten per cent from January to June a year ago, which is ultimately reflected in a decline in exports.
UPM’s plans to close the Kaipola paper mill in Jรคmsรค, Central Finland, continue to have a negative impact on exports.
Source: The Nordic Page