The Finnish economy must re-discover its growth momentum in the fourth quarter if it is to meet expectations and expand by roughly 2.5 per cent year-on-year in 2018, says Timo Vesala, the chief economist at Savings Bank Finland.
Statistics Finland on Friday reported that the country’s output volume grew only by 0.4 per cent from the previous quarter between July and September.
The statistical institution also published its revised statistics for the second half of the year, revealing that the volume of the gross domestic product grew by 0.3 per cent quarter-on-quarter and by 2.3 per cent year-on-year between April and June.
Statistics on foreign trade, investment activity and private consumption have similarly begun showing signs of a slowdown.
Finnish exports decreased by 1.8 per cent quarter-on-quarter and 1.3 per cent year-on-year in the third quarter of the year. Investments fell by 1.4 per cent from the previous quarter and 1.0 per cent from the previous year. Private consumption, in turn, decreased by 0.5 per cent from the previous quarter but increased by 0.4 per cent from the corresponding period one year earlier.
“The appeal of factors affecting demand evidently became subdued around the halfway point of the year,” summarised Vesala. “It is particularly concerning that exports have started to decline rather noticeably over the two most recent quarters. Also investments are slowing down.”
He also reminded that the slowdown was expected and, as a result, many forecasting agencies may have been excessively optimistic about private consumption.
“The pace has slowed down unfortunately also in that respect, and it seems obvious that the expectations that private consumption would increase were overstated,” said Vesala.
Jukka Appelqvist, the chief economist at Danske Bank, has similarly voiced his concern about the latest economic statistics.
“Exports and industrial investments both decreased, and also private consumption did not develop as positively as one could have assumed amidst an environment of such positive employment and wage developments,” he commented.
He pointed out that some forecasting agencies have already had to downgrade their highest forecasts, adding that others will have to follow suit unless the pace picks up.
Aleksi Teivainen – HT
Source: Uusi Suomi