Finland’s Q2 GDP shrinks 4.5%

Finland’s second-quarter economic output fell 4.5% from the previous quarter, Statistics Finland said on Friday, outstripping an earlier flash estimate of a 3.2% drop.

The second-quarter gross domestic product (GDP) drop caused by the COVID-19 pandemic was the smallest among eurozone economies, according to flash estimates collected by Eurostat in August.

The eurozone’s GDP dropped 12.1% on average in the second quarter, with Spain contracting as much as 18.5%, the flash data showed.

Finland saw the biggest drop in accommodation and food services, down 44.3% from the previous quarter, while the value added generated by transportation and storage fell 17.7%, Statistics Finland said.

On a yearly basis, second-quarter GDP adjusted for working days went down by 6.4%, it added.

SEB’s chief strategist, Jussi Hiljanen, said several factors explained why Finland’s economy had contracted less than those of peer countries.

One of the reasons was that the lockdown Finland adopted early on in the pandemic proved very successful in containing it, allowing the country to lift most restrictions after two-and-a-half months only, he said.

“Finland’s post-cyclical industry and long order books helped to maintain production running throughout the spring and the beginning of the summer,” he added, but warned the lack of new orders would be felt later in the year.

The gloomy expectations were reflected in Finland’s industry confidence indicator, which scored -19 while the long-term average is +1, the Confederation of Finnish Industries had said a day earlier.

Reuters