According to Statistics Finland’s preliminary data, the volume of Finland’s GDP fell by 2.9% in 2020.
The fall was slightly revised from the initial preliminary data from March, where it was 2.8%.
The effects of the coronavirus crisis varied between industries. Some of the largest declines concerned the accommodation and food services service industry and transportation.
The value added to the whole economy at current prices fell by 1.6% and volume by 3% in 2020.
The coronavirus had a particular effect on demand for services and in 2020, the current priced value added of service industries decreased by 1.9%. The volume of service fell by 3.6%.
Source: Statistics Finland.
The variation between service industries was great. Some services experienced sharp drops in value added, like accommodation and catering, transport, arts, as well as entertainment and recreation.
Value added grew in the information and communication industry. Value added at current prices was growing slightly in many industries but the growth remained lower than normal.
Among manufacturing industries, the electronic and electrical industry grew clearly in 2020. Overall, value added in manufacturing at current prices declined by 1.3% from the year before.
Source: Statistics Finland.
ConsumptionSimilarly to value added, household consumption expenditure also shows exceptionally large variations by consumption category. The consumption expenditure of Finnish households abroad, as well as that of non-resident households in Finland, remained at unusually low levels.
In addition, exceptional decreases were seen in the consumption expenditure of culture and recreation and clothing, for example. Consumption expenditure on transport was also falling heavily, as was consumption expenditure on accommodation and food service activities.
Growth in private consumption was seen especially in food, alcoholic beverages, and domestic appliances and furniture.
Investments in decline
The current priced value of investments was 57 billion euros in 2020. The volume of investments fell by 1%.
The volume of private investments went down by 3%. Investments in machinery and equipment decreased by 5%. Investments in buildings and structures, as well as in intellectual property products also decreased from 2019.
The volume of public investments increased by 11%. Measured in euros, the biggest growth was seen in civil engineering.
Government deficit grew
The financial position, or net lending, of general government showed a deficit of 12.8 billion euros. In the previous year, the deficit was 2.3 billion euros.
General government deficit was boosted in 2020 by expenditure related to the coronavirus pandemic and the decrease in the accrual of tax revenue and social security contributions, the main individual items of which were reductions in corporation taxes and employment pension contributions. In 2020, the deficit was 5.4% relative to GDP.
The deficit of central government was 13.1 billion, while one year before it was 2.6 billion euros.
According to preliminary data, local government (municipalities and joint municipal authorities, etc.) was in surplus after a long time, by 45 million euros. Central government contributed to the costs of the Covid-19 pandemic in local government and the deficit of local government turned into surplus as central government transfers to local government grew.
The wages and salaries sum of the whole economy fell by 0.4% in 2020. The number of employed persons went down by 2.1% and that of hours worked by 3%.