GDP contracts by 0.4% in Q1 YoY

The volume of Finland's gross domestic product (GDP) contracted by 0.4 percent in the first quarter of 2023 on a year-on-year (YoY) basis, reported Xinhua, quoting Statistics Finland on Wednesday.

However, the country's economy grew by 0.2 percent from the previous quarter.

The agency explained that the contraction of investments slowed down the growth of the national economy.

In the first quarter, gross fixed capital formation, or investments, contracted by 3.0 percent from the previous quarter. As a result, both private and public investments decreased.

Meanwhile, the volume of exports decreased by 0.1 percent from the previous quarter, and the volume of imports declined by 2.7 percent from the previous quarter.

According to the Finland Chamber of Commerce, the development of the country's GDP at the beginning of this year was significantly weaker than expected.

"The estimate of economic development was significantly revised downwards, which fits better with the general interpretation of the situation of the Finnish economy," Jukka Appelqvist, chief economist of the Finland Chamber of Commerce, said in a press release published on Wednesday.

Appelqvist said that the economy's fundamentals would not favor rapid growth for the time being due to strong headwinds in the economy. Moreover, difficulties are ahead, as consumers' savings are starting to decline, the eurozone's industry is in trouble, and the outlook for construction investments remains gloomy.