HELSINKI, Feb 27 (Reuters) - Finland is officially in recession after its economy shrank at the fastest pace in 16 years in October-December and the previous quarter's GDP was also revised to a contraction, Statistics Finland said on Friday.
The rapid economic downturn was caused to a large extent by collapsing exports as the financial crisis spilled over to the global economy -- exports fell 14.2 percent from the same period a year earlier.
Private consumption fell 1.2 percent and investments by just over 2 percent in the same period.
"All the parts of the economy were doing badly, and especially exports languished," said Nordea economist Reijo Heiskanen. "With this basis, the economy will contract about 2 percent this year."
Finnish gross domestic product (GDP) fell 1.3 percent in the
fourth quarter from the previous quarter and dropped 2.4 percent
from the same quarter a year earlier, the statistics office
said. It revised third quarter data to show a 0.3 percent
quarter-on-quarter contraction, instead of the 0.1 percent
growth initially reported.
"The figures were just as frightening and hideous as other indicators already showed," said OP-Pohjola Chief Economist Anssi Rantala. "It indicates that this year will be very weak."
For 2008 overall, GDP grew by 0.9 percent, because the economy performed better early in the year.
But Nordea's Heiskanen said there is one point of light in the recent data. "Consumers might have gone past the worst fright, as January retail sales and February confidence indicators were up."
For previous stories on Finnish GDP, double click on [FIGDPY=ECI] or [FIGDPQ=ECI] [FIGDP=ECI] (Reporting by Helsinki newsroom; Editing by Ruth Pitchford)