The economy | Finland’s economy grew solidly in the spring, especially boosted by industry

Based on preliminary data, the economy grew in April–June by 0.6 percent from the previous quarter.

Finland economic growth was surprisingly strong in April–June. According to preliminary data published by Statistics Finland on Wednesday, seasonally adjusted gross domestic product grew by 0.6 percent from the previous quarter.

“Economic growth was largely based on the fact that industrial production has grown strongly throughout the beginning of the year. This is because many industrial companies have long contracts that have sustained demand. Unfortunately, there are already signs that the orders have decreased”, says the Forecasting Manager of the Institute for Economic Research Markku Lehmus.

The main reason for the decrease in orders is the uncertainty of the global economy. At its center is the war of aggression started by Russia in Ukraine and the strong acceleration of inflation, especially in the United States and the Eurozone.

Last From April to June of the year, gross domestic product adjusted for working days increased by 2.3 percent based on preliminary data. Gross domestic product, which measures the standard of living, means the total value of goods and services produced for final use.

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Based on the new preliminary data published by Eurostat, the European Union’s statistical office, on Wednesday, the euro area’s seasonally adjusted gross domestic product grew by 0.6 percent in April–June, i.e. the same amount as in Finland.

“It is possible that the forecasts for this year’s growth in the Finnish economy will have to be changed to brighter ones in the fall, or that a recession is clearly expected in the forecasts. It’s also good to keep in mind that preliminary data on gross domestic product was only published on Wednesday, which may still change,” says Lehmus.

In March, the Finnish Business Research Institute predicted that Finland’s gross domestic product would grow by 2.1 percent this year.

Research institute Labore’s Forecast Manager Sakari Lähdemäki does not consider the strong economic growth in April–June a surprise.

“The industry is doing well. In addition, the demand for services has also been good throughout the beginning of the year, which is mainly due to the recovery from the coronavirus pandemic.”

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In the forecast published in the spring, Labore estimates that the Finnish economy will grow by 1.8 percent this year.

“It is possible that the forecasts will have to be adjusted slightly upwards. On the other hand, based on the cyclical index of production, economic growth was already slightly weaker in June. Russia’s war of aggression in Ukraine and the tightening of monetary policy overshadow economic growth,” says Lähdemäki.

International the International Monetary Fund (IMF) estimated at the end of July that the outlook for the world economy has darkened significantly. According to it, the world economy may soon be on the brink of another recession.

If Russia completely suspends the sale of natural gas to Europe and inflation accelerates more than expected, the IMF estimates that the economic growth of the United States and the euro area will stop.

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