Statistics Finland: economy has bottomed out

GDP grew 0.3% in third quarter but was down 9% year-on-year

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Preliminary data from Statistics Finland published on Tuesday morning indicates that in the third quarter of 2009 Finland’s GDP increased by 0.3% from the previous quarter, while compared to the third quarter of 2008, GDP adjusted for the number of days worked contracted by 9.1%.
      Statistics Finland adjusted its accounting methods in December and is now reporting the seasonally-adjusted GDP figures.
      The quarterly numbers are hence not totally comparable over the longer term, and as Statistics Finland themselves acknowledge "especially in exceptional economic situations like the present, seasonally adjusted and trend data contain more uncertainties than usual".
     
The revisions show a positive figure for GDP growth between July and September, though without seasonal adjustment the Q3 figures would also have dipped just over 2%.
      Another retrospective change indicated that the volume of GDP in the second quarter improved somewhat from the earlier assessment of a 2.6% decline, to a fall of just 0.3%, while the year-on-year figures for Q2 improved marginally from -9.4% to -9.1%.
      ”We had to think long and hard about whether we dared do this [make the adjustments]. Our interpretation based on what we have observed is that the economy has bottomed out at this point. The seasonally-adjusted trend figures tell the story more accurately", explained Senior Actuary Samu Hakala from Statistics Finland.
      Anssi Rantala, Chief Economist for the financial servicers group OP-Pohjola, expresses surprise at the statisticians' move.
     
”The first impression is that Statistics Finland have not been producing statistics so much as interpreting the collapse in the economy in a different manner. The seasonal adjustment is a statistical trick", says Rantala.
      He points out that nothing is going to change the fact that output in Finland has fallen by 9.1% in a year, and adds that the rise in the economy has not yet started, even if the bottom of the trough may now be visible.
      ”The current year is in any event extremely bad in terms of output", says Rantala.
     
According to the latest numbers, the volume of Finnish exports contracted by 26.6% year-on-year, while the figure rose 0.6% from the second quarter. Imports were down by 24.5% from the previous year, but rose 3.3% on the figures for April to June. Again, in Q3 the volume of private consumption was up by 0.3 per cent from the previous quarter but was 1.1% lower than it had been twelve months previously.
      Investments, meanwhile, remained in the doldrums. They declined by 7.9% from the previous quarter and by as much as 20% year-on-year.
     
The reasons for the Statistics Finland adjustments are given on their online pages.


Previously in HS International Edition:
  Finland´s second-quarter GDP falls by 9.4 per cent from last year (8.9.2009)

Links:
  Statistics Finland: Seasonally-adjusted GDP

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