Væksten i Finland fald drastisk i 4. kvartal, og for hele året blev den på 1 pct., langt mindre end forventet. Eksporten steg dog pænt. Handelsbanken venter, at væksten i år vil falde til 0,9 pct.
Uddrag fra Handelsbanken:
A sharp decrease in GDP in Q4; Finnish GDP grew only 1.0 percent in 2019
• Net exports markedly supported 2019 GDP growth
• Risks to our 2020 GDP growth forecast are tilted to the downside
GDP decreased more than expected in Q4, by 0.7 percent q-o-q
The preliminary GDP data showed that the Finnish economy took a dive at the end of last year. According to Statistics Finland, Finnish GDP decreased by 0.7 percent q-o-q in Q4 2019. That was even worse than the 0.4 percent decline suggested by the previously published monthly GDP indicator. Moreover, Q3 growth was revised down from 0.7 to 0.4 percent q-o-q. Some kind of downward revision was expected, as Statistics Finland made revisions to Q3 investments already in early December by removing two large investments in intellectual property products. In Q4 2019, GDP grew by 0.4 percent from Q4 2018. The annual growth rate in 2019 was 1.0 percent, which is much weaker than what was broadly expected.
Net exports markedly supported 2019 GDP growth
The main contributor to annual GDP growth in 2019 was foreign trade. Net exports made a substantial positive contribution to GDP growth with exports growing briskly. The volume of exports expanded by 7.1 percent y-o-y, as exports of goods grew by 3.0 percent and service exports by as much as 16 percent y-o-y. The volume of imports increased by 2.5 percent in 2019. Private consumption increased by 1.0 percent in 2019, whereas public consumption expenditure fell by 0.3 percent. Gross fixed capital formation (i.e. investment) contracted by 1.1 percent last year, as all main investment components weakened from the previous year. Construction investments fell by 0.9 percent, investments in machinery and equipment declined by 0.5 percent, and investments in research, development and software contracted by 3.0 percent. In Q4, private consumption decreased by 0.3 percent q-o-q but increased by 1.5 percent y-o-y. Investments fell by 0.1 percent q-o-q and 3.1 percent y-o-y. Within investments, construction investments decreased by 1.4 percent q-o-q and 3.2 percent y-o-y. The volume of exports expanded by 2.1 percent q-o-q and 8.2 percent y-o-y, whereas the volume of imports contracted by 1.6 percent q-o-q and 0.7 percent y-o-y in Q4.
Risks to our 2020 GDP growth forecast are tilted to the downside
The Q4 GDP figures were clearly a disappointment. The preliminary 0.7 percent contraction is the weakest since Q1 2015. A brisk export performance was the only component supporting GDP growth, as it was underpinned by a cruise ship delivery. All other main demand aggregates deteriorated in q-o-q terms in Q4 2019. Furthermore, annual growth in 2019 was much lower than was generally expected. Our latest forecast was 1.5 percent. Earlier downward revisions to Q3 investment data by Statistics Finland hinted that the investment performance in 2019 would prove weak, but the 1.1 percent contraction was still more than expected. In addition, private consumption weakened again in Q4 after rather strong Q3 figures. However, exports in general, and service exports in particular, were strong throughout the year, whereas inventories and statistical error subtracted from GDP growth quite substantially. It is also interesting that, according to the revised data, the q-o-q GDP growth was negative in both Q2 and Q3 2018. Technically then, Finland was in recession at that time. A weak performance to the end of 2019 does not bode well for economic growth this year. The base effect from last year for this year’s GDP growth is now negative. In addition, with the coronavirus outbreaks increasingly affecting global markets, the growth risks are certainly tilted to the downside, even in Finland. Our GDP forecast for 2020 is currently 0.9 percent.
