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Finland’s GDP makes "surprising" Q3 recovery

One economist says the Finnish economy's strong Q3 performance demonstrates its resilience to the coronavirus crisis.

Rekkojen perävaunuja Hangon satamassa.
Statistics Finland's data revealed that the volume of exports increased in Q3 by 2.6 percent compared to Q2, but decreased by 12.7 percent year-on-year. Image: Petteri Bülow / Yle

Finland's working-day adjusted GDP grew by 3.3 percent in July to September compared with April to June, according to figures released by Statistics Finland.

The data agency said the figure is "surprisingly high", as it exceeded Statistics Finland's previous Q3 growth estimate of 2.6 percent.

Compared with the same period last year, Finland’s working-day adjusted GDP contracted by 2.7 percent, which is also a slight improvement on the previous estimate of -4.0 percent.

Statistics Finland also announced a revision of its Q2 readings, which was reported in August to have fallen by nearly 4.5 percent from Q1.

The revised figure suggests a drop of only 3.9 percent from the previous quarter of January to March.

Chief Economist Pasi Kuoppamäki of Danske Bank said he considers the latest GDP figures to be an encouraging sign of the Finnish economy’s resilience to the coronavirus crisis.

"The coronavirus crisis is likely to ease its grip in 2021, when vaccines become widely available. The core of the economic challenges is gradually shifting from short-term survival to longer-term challenges, such as population ageing and weak productivity development," Kuoppamäki said.

Economic effect "less than feared"

Timo Hirvonen, the chief economist at Handelsbanken, said the effects of the coronavirus crisis on the Finnish economy have not been as bad as was previously expected.

"The Finnish economy has dropped less than feared during the coronavirus period," Hirvonen said, adding that the second coronavirus wave as well as austerity measures in Europe are stifling Finland’s export trade, which would have made the GDP recovery even more pronounced.

According to Statistics Finland, the volume of exports increased by 2.6 per cent in July to September from the previous quarter, but decreased by 12.7 percent year-on-year.

"The total demand of the national economy was 6.1 percent lower than a year ago, so part of the GDP growth came from the expansion of stocks as well as statistical errors, which in turn partly contributes to the difficulty of assessing the economic situation," Kuoppamäki said.

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