Tuesday June 9, 08:43 AM
Finnish economy drops by 2.7 percent in Q1
HELSINKI (AFP) - Finland's economy contracted 2.7 percent in the first quarter of 2009 compared to the fourth quarter of 2008, when the economy shrank by 2.1 percent, official data has shown, signalling a recession.
A recession is traditionally defined as two consecutive quarters of negative growth.
On annual basis, the Nordic country's gross domestic product (GDP) fell in January-March by a whopping 7.6 percent.
Statistics Finland said it had revised the quarter-on-quarter GDP drop in the fourth quarter to 2.1 percent from an earlier estimate of 1.3 percent.
The Nordic country, home to the world's biggest mobile phone maker Nokia (Xetra: 870737 - news) and paper makers Stora Enso (Munich: 871004 - news) and UPM-Kymmene, is heavily dependent on foreign trade. In 2008 Finnish GDP grew by 0.9 percent, half of which came from foreign trade.
Finland was hit by the global financial crisis in the second half of 2008 when demand for its key exports fell sharply, and the January-March period this year, foreign trade continued to shrink.
"The volume of exports contracted by 25.5 percent and that of imports by 19.4 percent year-on-year," Statistics Finland said in a statement.
It added the private consumption fell by 3.7 percent in the first quarter, while investments were down 8.9 percent.
In March, the finance minister and the central bank forecast Finnish economy would contract 5.0 percent in 2009.
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