Finland sinks into recession despite GDP growth

Despite Finland's gross domestic product (GDP) increased by 2 percent year-on-year in 2022, Statistics Finland said on Tuesday that the country has entered a recession, as GDP change was negative during the last two quarters of the year, reported Xinhua.

"GDP has turned downward, meaning that the technical definition of a recession is fulfilled. Finland is in recession in light of these data," Samu Hakala, head of Statistics Finland, said on Tuesday.

GDP decreased by 0.1 percent in the third quarter and by 0.6 percent in the fourth quarter from the previous quarters respectively.

In the fourth quarter of 2022, private consumption decreased by 0.6 percent from the previous quarter, while government consumption expenditure decreased by 1.2 percent. Meanwhile, investment decreased by 2.0 percent.

The Ukraine crisis and the high inflation rate weakened both consumers' and entrepreneurs' confidence in the future, Statistics Finland noted. In the second half of 2022, GDP and private consumption started to decline, it said.

In the whole of 2022, the volume of exports grew by 1.5 percent and that of imports by 7.4 percent, and investment increased by 5.8 percent.

According to Jukka Appelqvist, chief economist of the Central Chamber of Commerce, one year's worth of economic growth in Finland has practically been wiped out, as a result of the latest economic crisis.

"The reading sounds good, but it only reflects the so-called growth legacy and the recovery from the COVID-19 at the beginning of the year," said Appelqvist in a press release.

The economic crisis that started with the Ukraine conflicts has been marked by a gradual deterioration of the economic situation, driven by high inflation and tightening monetary policy, Appelqvist said.

"There is still no talk of a collapse," said Appelqvist, adding that he estimated that the slump would continue for several more months.