GDP growth nearly stopped in late summer

Expert says November “nearly a free fall”

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Growth in GDP nearly stopped in the late summer and early autumn of this year. According to figures put out by Statistics Finland on Monday, GDP grew in the July-September period by just 0.1 per cent compared with the previous quarter.
     Compared with the same period a year earlier, GDP showed 1.3 per cent growth.
     
Factors inhibiting growth included slower exports, declining construction, and problems with the wood and paper industry. Residential construction has declined all year, but in the autumn, growth in business premises construction also stopped. In household spending, consumption of food, electricity, and fuel declined.
     In the autumn, growth was maintained by the metal industry.
     
The stop in growth did not come as a surprise to Jussi Mustonen, head of economic policy matters at the Confederation of Finnish Industry (EK). According to Mustonen, the figures put out by Statistics Finland are in line with the cyclical barometers put out by EK.
     “These figures are not surprising as such on the level of the whole economy, because our [the EK] cyclical barometer indicated already in June that we are going into recession, as far as industrial output is concerned. This applied to the second quarter. In the third quarter the trend only became stronger.”
     
Mustonen will not make predictions based on the Statistics Finland figures, on the state of the economy right now. The EK’s own confidence indicator is nevertheless “going down really fast”, he says.
     “No end is in sight there yet. The turnaround took place in October, and in November it only grew deeper. November was nearly a free-fall.”
     Mustonen does not see any signs that the downhill trend in the economy would be straightening out.


Previously in HS International Edition:
  Labour Minister Cronberg expects higher unemployment in new year (2.12.2008)
  Finance ministry: lower taxes, less inflation, recession can be avoided (19.11.2008)
  Government to decide on support for flagging construction sector (18.11.2008)
  Recession expectations pushing down fuel prices (18.11.2008)

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