Double-dip recession hits Finland

After starting to recover, Finland’s economy slipped back into recession at the beginning of 2010, according to official figures. Following a decline of 0.2 percent in December 2009, the economy contracted by a further 0.4 percent in the first three months of this year.

In what is known as a double-dip, Finland has become the first eurozone country to emerge from recession only to re-enter it. Trade has been hard hit by the global downturn, especially in the country’s key industry areas of paper and Nokia mobile phones.

Finland had the sixth most competitive economy in the world last year, according to a report released by the World Economic Forum. From April 2008 to June 2009, it contracted for four quarters in a row before growing by 0.5 percent in the third quarter of last year.

Finland is now considered to be in recession again, however, after two quarters of consecutive contraction. Finland and Luxembourg are the only two countries in the eurozone to have stuck stringently to the EU’s fiscal rules of keeping debt under 60 percent, and government deficit below three percent, of GDP.

Exports have however recovered, rising by seven percent on April of the previous year to EUR 4.4bn (USD 5.3bn). This signalled the country’s biggest growth in trade since November 2008. A trade surplus of EUR 355m was reported by Finland for the first time in six months.