Finland entered recession in the final quarter of 2022, while the Swedish economy also plunged, official figures showed on Tuesday.
The 0.6 percent decline in Finnish GDP was the second consecutive quarter of negative growth – the technical definition of recession.
Statistics Finland said Finland’s economy was hit by a sharp drop in inflation – which reached 8.4 percent in January – as well as the economic consequences of the war in Ukraine.
The office said both consumers and businesses have low confidence in the future and that “weaker expectations began to be felt in the second half of the year.”
From October to December, the volume of Finnish exports decreased by 2.9 percent from the previous quarter’s level, while imports fell by 2.4 percent.
However, for the full year, Finland’s economy is projected to grow by two percent for 2021 compared to the previous year.
The national statistics office SCB said Sweden has not seen two consecutive declines in gross domestic product, but its economy has still shrunk.
Swedish GDP fell 0.2 percent in the fourth quarter compared to the same period a year earlier.
“The downturn is being felt in many parts of the economy, with a broad drop in business investment and household consumption,” SCB’s Jessica Engdahl said in a statement.
The SCB said that for the full year of 2022, the Swedish economy grew by 2.6 percent.
According to its latest forecast published in early February, the Swedish central bank expects GDP to shrink by 1.1 percent this year, which is in line with the European average.
In Finland, the government and central bank forecast a decline in GDP of about 0.2 percent in 2023 before growth returns in 2024 and 2025, according to their latest forecast in December.
