Containers at the Vuosaari harbour. LEHTIKUVA


Finland's economy faced a downturn in the third quarter of 2023, with the country's Gross Domestic Product (GDP) shrinking by 0.9% from the previous quarter, according to the latest data from Statistics Finland. This decline is contrasted with the stable economic performance observed across the European Union during the same period.

In a year-on-year comparison, Finland's workday-adjusted GDP was 1.2% lower than the same period in the previous year.

The decline marks a shift from the growth witnessed in the first two quarters of 2023, signaling a reversal in the country's economic trajectory.

Eljas Tuomaala, a senior statistician at Statistics Finland, highlighted the change in Finland's economic fortunes. "After two consecutive quarters of growth in 2023, Finland's economy has taken a downturn in the July-September period. Initially outperforming the EU average, the Finnish economy has now experienced a contraction, while the EU's overall economy remained stable," said Tuomaala.

The downturn was evident across various sectors, including industry, construction, trade, and several service industries. "The forestry industry, in particular, saw a significant reduction in its value added, shrinking by over 7%. The challenging situation in construction continued into the third quarter. After a long period of growth, the service sectors as a whole turned downward, with several industries experiencing reduced value added compared to the previous quarter," explained Tuomaala.

Private consumption in Finland also declined by 0.6% from the second quarter, while public spending decreased by 2.7%. Investments contracted by 1.5%, with both private and public sector investments decreasing by 1.5% and 1.2%, respectively.

Tuomaala noted a particular decline in construction investments. "Building investments, especially in residential construction, saw a significant decrease in the third quarter," he stated.

Additionally, Finland's export volume dropped by 1.8% from the second quarter level, although the decline was less pronounced than the 3.2% decrease in import volume. This disparity in trade dynamics further underscores the challenges facing the Finnish economy as it navigates the latter half of 2023.