Finnish economy slipped into recession in late 2023

Finland’s GDP was down by 0.7 percent for the period of October through December from the previous quarter, reports Statistics Finland.

Adjusted for working days, GDP was 1.8 percent lower during the final quarter of 2023 than a year earlier. For the whole of last year, GDP contracted by 1.0 percent year-on-year.

Statistics Finland also says that it has revised the figures for the third quarter of last year. In July-September, GDP fell by 1.1 percent compared with the previous quarter and by 1.6 percent year-on-year. The contraction was larger than previously reported for both calculations.

In a posting on the messaging service X, Jari Hännikäinen, Senior Market Economist at OP Group, wrote that with the publication of last year’s GDP figures Finland’s development looks grim compared to its competitors.

Hännikäinen added that since 2007, Finland’s economy has grown by six percent while Sweden’s by expanded more than 30 percent.

Growth in only a few sectors

According to Statistics Finland, output in the chemical, metal and electrical and electronics industries fell in October-December from the previous quarter. Output in the forest industry fell sharply in the second and third quarters, but the decline came to a halt in the last quarter of the year.

Looking at developments for the whole of 2023, Statistics Finland was able to point to growth in only the metals industry, energy, water supply and waste management.

The volume of construction has been falling since early last year and continued to do so throughout 2023. The decline in housing construction has been particularly steep, while the trend in civil engineering has been more mixed.

The trade sector contracted significantly in January-March last year, but has since then shown mixed growth.

Hospitality services grew last year thanks to a strong first quarter, but since then the trend has been downwards. Among other service activities, information and communication grew steadily last year. The volume of transport was lower than in the previous year, although it also also showed growth in the second and third quarters.