A construction worker carrying planks of wood at a construction site in Espoo in March 2021. Data from Statistics Finland have been welcomed as a sign that the Finnish economy is starting to emerge from its recession, reports YLE. (Markku Ulander – Lehtikuva)
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NEWS that Finland’s gross domestic product grew by 0.5 per cent between the fourth quarter of last year and the first quarter of this year has provoked an excited reaction from economists, reports YLE.
Reijo Heiskanen, the chief economist at OP Financial Group, welcomed the provisional data as a sign that the recession is over in an all-caps exclamation on X.
“Maybe lower-case letters would have been enough, but nonetheless the first quarter was better than expected despite the strike-related dip in March. The outlook for the end of the year is resurgent,” he wrote. “As far as economic growth is concerned, these figures naturally support the view that the recession is starting to be over, even though they’re preliminary figures that’ll be specified later.”
“This is such good news that I’m not sure if I should believe it,” echoed Pasi Sorjonen, the chief economist at the Confederation of Unions for Professional and Managerial Staff (Akava).
Statistics Finland on Wednesday published preliminary data showing that the gross domestic product contracted by 0.4 per cent year-on-year in the first quarter. March was largely to blame for the contraction, with the monthly figure contracting by 0.8 per cent from the previous year and 1.0 per cent from the previous month.
“The March of strikes was weak, but the year got off to a decent start. If the GDP stayed at this level for the rest of the year, the change for the entire year would be -0.5 per cent,” commented Pasi Kuoppamäki, the chief economist at Danske Bank.
Heiskanen on Wednesday gauged that the national mood has possibly been too gloomy given the situation in key export markets. The provisional data, he viewed, corroborate the view that the economy beginning to stabilise with a turn for the better in sight.
“Hopefully the excessive pessimism will start to evaporate,” he said.
It will nevertheless take some time for the economy to truly pick up, he acknowledged, given that changes in output are not immediately reflected across society.
“It really may not be until next year that we’ll start seeing the economy recover on a broader basis and the recession clearly come to an end. We’re now in the very early stretch of things turning in a better direction,” cautioned Heiskanen.
The data also indicate that the ranks of the employed grew by 0.7 per cent quarter-on-quarter and 0.6 per cent year-on-year between January and March. Heiskanen viewed that it will take at least six months for the economic turnaround to translate to a clear drop in unemployment and rise in employment.
“Really it won’t be until next year until the labour market situation starts improving from the level it fell to during the recession,” he said.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
