GDP grows by 1.4% in 2016

The volume of Finland’s Gross Domestic Product (GDP) grew by 1.4 per cent in 2016, according to Statistics Finland’s preliminary data.

The growth rate became slightly revised from the data published in early March (was 1.6 per cent). Last year, GDP that describes the output of the national economy stood at EUR 214 billion. National income describing the income of the national economy went up by 2.0 per cent in real terms.

The demand of the national economy went up by 1.7 per cent last year. The demand was raised in particular by investments and households' consumption expenditure.

Investments were 5.2 per cent higher than one year previously. The volume of private consumption went up by two per cent and public consumption by 0.5 per cent. The volume of exports grew by 0.5 per cent and that of imports by 2.5 per cent.

Non-financial corporations' operating surplus describing profits from their actual operations grew by 3.4 per cent. Entrepreneurial income that describes the profit before payment of taxes and dividends also grew by 3.4 per cent. It is estimated that non-financial corporations paid around five per cent less dividends and eight per cent more direct taxes than in the year before. Non-financial corporations' financial position showed a surplus of EUR 8.2 billion.

The financial position of financial and insurance corporations showed a deficit of EUR 0.5 billion. Financial corporations’ interest income (financial intermediation services indirectly measured) remained unchanged and commission income increased by two per cent.

The financial position of general government, i.e. net lending, was in deficit for the eight successive year, EUR 4.1 billion. In the previous year, the deficit was EUR 5.7 billion. The deficit amounted to 1.9 per cent relative to GDP. Statistics Finland will publish the deficit and debt data to be reported to the European Commission on 31 March 2017. The deficit data published here may become revised in that connection.

The deficit of central government was EUR 5.9 billion, while one year before it was EUR 6.3 billion. One of the reasons for the contraction of the deficit was a 5.1 per cent growth in tax revenues. The deficit or net borrowing of local government (municipalities and joint municipal authorities, etc.) contracted to EUR one billion according to preliminary data, having been EUR 1.3 billion in the year before.

The surplus of employment pension funds decreased from EUR 2.7 billion to EUR 2.3 billion. The surplus was lowered by growth in paid pension benefits, while pension contributions remained almost unchanged. The surplus does not include holding gains in assets. Other social security funds showed a surplus of EUR 0.5 billion due to increased income from unemployment insurance contributions.

General government's share of the gross value added was 19.8 per cent in 2016, which is 0.6 percentage points lower than in 2015.

Households' adjusted real income grew by 0.7 per cent. Adjusted income also takes into consideration welfare services, i.e. the individual services that general government and organisations produce for households, such as educational, health and social services.

Wage and salary income grew by 1.6 per cent in nominal terms. Social security benefits went up by 2.1 per cent as the number of pensioners increased.

Direct taxes paid by households and compulsory social security contributions increased by 1.8 per cent. Final consumption expenditure grew by 2.7 per cent in nominal terms. Investments, mainly in dwellings, increased by as much as 12.2 per cent.