Finland in recession as GDP drops again

HELSINKI, Feb 29 (Reuters) – The Finnish economy again fell into recession during the second half of 2023, the national statistics agency said on Thursday, as high inflation and soaring interest rates hurt investment and economic sentiment.

October-December gross domestic product (GDP) declined by 0.7% from the previous quarter, while in July-September it had fallen by 1.1% compared with the previous three months, the official data showed.

The Finnish economy had briefly bounced back with 0.4% growth during the second quarter of 2023 after last falling into recession towards the end of 2022.

Electronics, forestry and hospitality sectors were hit the hardest, while finance and insurance was the only industry that saw significant growth, the statistics agency said.

The Finnish central bank in December forecast that higher interest rates and prices, lower investments and uncertainty about the future would continue to burden the economy this year. It estimated recovery to begin towards the end of 2024.