Finland’s GDP down two pct in Q4 2020, but shows sign of recovery

The economic growth in Finland in the fourth quarter (Q4) of 2020 was two percent lower year-on-year, but grew 0.2 percent from the previous quarter, Statistics Finland announced in a press release issued on Tuesday.

It is estimated that the number of the employed in Q4 2020 has decreased by around 1.5 percent from one year ago, according to the statistical agency.

Besides, in December 2020, seasonally adjusted output of the national economy decreased by 0.8 percent from the previous month, 1.8 percent lower from a year back.

Of the national output in December, working day adjusted primary production grew by around 6 percent year on year. Secondary production declined by about one percent and services by around two percent from December 2019.

Primary production refers to agriculture, hunting, forestry and fishing. Secondary production includes manufacturing and construction. Services comprise trade, hotel and restaurant activities, transport and business activities, as well as real estate, renting and research services, financial intermediation and insurance, and public services.

Finnish economists believed that the figures show signs that the economy may have started to pick up towards the end of 2020, and are optimistic about the growth in 2021.

Jukka Appelqvist, an economist of Danske Bank, commented on social media that the contraction in production in December was expected as a result of the worsening situation of the COVID-19 pandemic. However, the state of the economy should still be considered good, he claimed.

“Although the economic situation is not tremendous, there is no sign that the economy will collapse in the same way as last spring. It is more likely that the next few months will continue at a low simmer,” Appelqvist predicted.

Timo Hirvonen, chief economist of Handelsbanken Finland, told business daily Kauppalehti on Tuesday that the Finnish economy is estimated to contract by 3.1 percent in 2020, in line with the preliminary forecast. He noted that the figures are good compared to many other economies.

“(COVID-19) Vaccinations will boost the Finnish economy this year. We expect economic activity to pick up after the beginning of the year, when economic austerity measures are lifted and mass vaccinations are launched,” Hirvonen added.