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Statistics Finland: Economy is officially in recession

Drops in GDP, export and employment for the second consecutive quarter indicates Finland is in economic decline.

Koronaviruksen takia suljettu ravintola kauppakeskus Isossa Omenassa.
Preliminary data from Statistics Finland for Q1 does not take into account the economic effects of the coronavirus pandemic. Image: Vesa Moilanen / Lehtikuva

Preliminary data released by Statistics Finland indicate that the Finnish economy has now entered a long-predicted recession, as exports fell by 7.4 percent and gross domestic product (GDP) was down 0.9 per cent in the first quarter of this year compared to the previous quarter.

In October to December of 2019, GDP decreased by 0.6 percent from the previous quarter, even though it increased by 0.5 percent year-on-year, according to the number-crunching agency.

A recession is usually defined as two consecutive quarters of economic decline, as reflected by GDP along with a number of other factors, such as a rise in unemployment.

Exports, imports and consumption also down

Statistics Finland’s preliminary data found other factors that also suggested the onset of recession, including a drop in the volume of exports, which contracted by 7.4 percent from the previous quarter and by 8.5 percent year-on-year.

Imports also decreased, by 3.5 percent from the previous quarter and by 4.1 per cent year-on-year.

Private consumption also decreased in the first quarter of this year, down by 0.6 percent from October to December 2019, while gross fixed capital formation (GFCF), more commonly called investments, decreased by 0.5 per cent from the previous quarter.

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