Tags: Finland | recession | slips | backs

Finland Slips Back Into Surprise Recession

Wednesday, 09 Jun 2010 08:27 AM

HELSINKI – Finland's economy slipped back into unexpected recession in January-March when gross domestic product (GDP) contracted for the second quarter in a row, official data showed on Wednesday.

In the first quarter of 2010 the volume of Finland's GDP fell 0.4 percent versus the fourth quarter of 2009, Statistics Finland said in a statement.

This meant that the economy had shrunk by 0.8 percent on a 12-month comparison.

"Two quarterly falls in a row was really a surprise," Handelsbanken Finland's chief economist Tiina Helenius told AFP, calling the figures "weak" and "disappointing".

She said that "consumers remain cautious, which is visible in particular in the very weak demand for services," adding that for many Finnish exports, including industrial machines, demand generally picks up later in the cycle.

Statistics Finland also revised down the GDP figure for the fourth quarter of 2009, saying the economy had slipped 0.2 percent from the previous quarter versus an earlier estimate of flat growth.

It also adjusted the year-on-year fall for the fourth quarter to 5.2 percent from a previously given 5.1 percent.

"According to the revised time series, the volume of seasonally adjusted GDP peaked in the second quarter of 2008, thereafter it fell very rapidly especially in the last quarter of 2008 and the first quarter of 2009," Statistics Finland said.

"Since then output has remained on level with the first quarter of 2009," it added.

In the third quarter of 2009, the economy grew 0.5 percent, the statistics office said.

The Nordic country's economy has been hit harder by the global economic downturn than those of most other European Union countries, and going forward, export-reliant Finland's performance will depend very much on recovery in key export countries like Sweden, Russia and Germany.

Earlier this week the International Monetary Fund (IMF) called Finland's economic outlook "unusually uncertain" given the depth of the recession and structural challenges like its rapidly ageing population.

The eurozone country's economy, which slumped nearly eight percent in 2009, is nonetheless expected to begin recovering this year, with the finance ministry forecasting 1.1-percent growth.

Unemployment was meanwhile expected to remain high, around nine percent.

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HELSINKI – Finland's economy slipped back into unexpected recession in January-March when gross domestic product (GDP) contracted for the second quarter in a row, official data showed on Wednesday.
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2010-27-09
 
 

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