Finland’s economic recovery gathered pace in the first quarter as consumer spending and investments continued to gain in the country dubbed the new "sick man of Europe."
Gross domestic product rose 0.6 percent from the previous quarter, according to Statistics Finland’s preliminary data. Adjusted for working days, economic output climbed 1.6 percent from a year earlier. Analysts surveyed by Bloomberg had expected a quarterly growth rate of 0.4 percent and an annual rate of 0.8 percent. Fourth-quarter growth was revised to 0.5 percent, from an earlier estimate of 0.1 percent.
Finland emerged from a three-year recession in 2015 after being battered by a slump in its paper industry, slowing export demand from Russia and the demise of Nokia’s mobile phone business. The government is now in the midst of pushing key labor market parties to cut wages in order to restore competitiveness.
At the same time, the European Central Bank has unleashed record stimulus programs to restore inflation and growth in 28-nation euro area, of which Finland is the northernmost member.
“Going forward, Finland is expected to grow sluggishly between 1 and 1.5 percent, unless manufacturing regains price competitiveness faster than expected,” said Juhana Brotherus, economist at housing institution Hypo.
First quarter estimates showed exports falling 1.1 percent and imports declining 1.8 percent on the previous three months. In contrast, private consumption gained 0.6 percent and investments rose 0.4 percent, according to the statistics agency.