HELSINKI, Sept 5 — Finland’s economy grew 0.2 per cent last quarter as falling demand in its trade partner Russia hurts the Nordic nation struggling to emerge from an industrial slump.
“Fading Russian trade slows down export growth,” Pasi Kuoppamaeki, chief economist at Danske Bank A/S in Helsinki, said in a note today. “‘‘Domestic demand is and stays weak as households’ purchasing power isn’t growing while general uncertainty and meager growth prospects smother investment intentions.”
Second-quarter gross domestic product fell 0.1 per cent from a year earlier, adjusted for working days, Statistics Finland said today in Helsinki. Economists had estimated unchanged output from the previous quarter and a 0.4 per cent contraction from the same period a year earlier, according to three estimates in a survey by Bloomberg.
Finland is struggling to emerge from its second recession since 2008 after austerity measures collided with a slowdown in its two biggest industries, technology and pulp production. The northernmost euro member’s economy is lagging behind its euro- area peers and Nordic neighbors.
A weakening of the Russian economy and a weaker ruble have hit demand in one of Finland’s biggest export markets. The fallout from the crisis in Ukraine, including a Russian import ban on a range of foods, is set to hurt Finland more than most other European Union nations. Trade data suggest Finland is more at risk of losses than any other euro nation.
Finnish exports grew an annual 0.9 per cent last quarter, while private consumption fell 0.2 per cent, the statistics office said in a statement. Gross fixed capital formation contracted an annual 3.5 per cent. — Bloomberg
