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Finnish Expansion Slows More Than Estimated as Consumption Wanes

Finnish Expansion Slows More Than Estimated as Consumption Wanes

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Finland’s economic growth slowed more than estimated at the start of the year, dragged down by decline in consumer spending and investments.

Growth eased to 0.2% in the first quarter from a revised 0.5% in the prior three month period. Three economists surveyed by Bloomberg had estimated growth of 0.5% in the January-March period. Gross domestic product expanded 1.2% in the year.

Finnish Expansion Slows More Than Estimated as Consumption Wanes

Key Insights

  • Private consumption, which has underpinned the economy through years of lackluster performance, shrank 1.2% in the first quarter, and investments contracted 0.3% from the prior three months.
  • Exports grew 3%, and imports shrank 5.7% in the quarter, in sign that global trade tensions had yet to hit demand for the Nordic nation’s exports.
  • Finland’s next government, likely to be composed of five parties left and center of the political spectrum, is hoping for faster-than-forecast growth to help pay for its proposed spending increases, local media have reported.

What Economists Say

  • Contraction in private consumption was a surprise given relatively good growth in retail sales at the start of the year, Chief Economist Timo Hirvonen at co-operative S-Bank said in a note to clients. That could be a one-off, he said.

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To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Jonas Bergman

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