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Finland's GDP drops nearly 5% in Q2

However, an economist noted that Finland's GDP decline was not as severe as in many other European countries.

Ilmakuvassa on Kampin kauppakeskus ja Narinkkatori toukokuussa 2020.
Helsinki as seen from above (file photo taken in May 2020) Image: Silja Viitala / Yle

Finland's working-day adjusted GDP plunged by 4.9 percent year-on-year in the second quarter, according to preliminary figures from Statistics Finland.

The number-crunching agency also reported that employment figures during that period, April-June, are expected to contract by around 3.2 percent, year-on-year.

Timo Hirvonen, the chief economist at Handelsbanken, attributed Q2's output decline to a decrease in exports as well as weak development in the services sector. But the economist said that the data showed signs of an economic recovery that began toward the end of the second quarter, in June.

While working-day adjusted GDP dropped by 4.9 percent during the second quarter, seasonally-adjusted output rose in June by 0.9 percent, compared to the previous month.

Hirvonen noted that the decline seen in Finland's GDP last quarter was clearly less of a drop than was seen in many other European countries, including neighbouring Sweden. According to the Swedish statistics agency, SCB, the Scandinavian country's GDP dropped by 8.6 percent in Q2.

Hirvonen said that exports will play a major role in shaping Finland's economy towards the end of the year. There are growing concerns that global demand could stagnate if a second wave of the coronavirus epidemic occurs. Meanwhile, he said the difficulties facing Finnish exports are on the rise.

"The long lead times for industrial order deliveries have kept the decline in Finnish industrial production less than in other countries this year," he said, adding the order backlog would support recoveries of industry and exports during the remainder of the year, despite the decline in new orders this year.

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