In Finland, the financial figures for April – May will be published next week. In Sweden, in the corresponding period, GDP fell by 8.6 per cent compared to the first quarter of the year and by 8.2 per cent compared to the spring season last year.
In the western neighborhood, the drop came as a surprise, as Sweden was expected to survive with a smaller drop - after all, it had kept its society open compared to the rest of Europe. Although the Swedish economy settled more than expected, it survived less than large economies such as Germany, France or the Eurozone on average during the quarter.
Finnish economic sages do not find the Swedish readings particularly shocking. Similarly, no conclusions can be drawn directly from them regarding Finland's readings.
OP's chief economist Reijo Heiskanen says that the Swedish readings were in line with the estimates. According to him, the second quarter was positive compared to the situation and according to preliminary estimates it will also be in Finland.
- According to Statistics Finland's experimental flash estimate, the Finnish economy contracted by 5.4 per cent in the second quarter compared to the same period last year, Heiskanen says.
In the euro area, the economy contracted by an average of 15% year-on-year. According to Heiskanen, Finland's better result is explained by the fact that Finnish industry has not closed at any stage and, on the other hand, the restrictions in the service sector have not been the strictest in Europe.
- Finland's drop would seem to be much milder than previously anticipated. In many other countries, the drop is much more severe.
Previously, the decline was forecast to approach 12 percent in Finland as well. The moderate decline in the second quarter also anticipates that the Finnish economy will not settle as much as previously anticipated throughout the year.
OP's chief economist Reijo Heiskanen believes that the bottom contact was seen in the second quarter.
Photo: Heikki Saukkomaa / Lehtikuva
With these prospects, Finland would seem to be surviving the korona better than average, and the second quarter would seem to remain at the bottom.
There is little uncertainty as to whether the industry will experience a shortage of orders caused by the corona. If the crisis in the world market continues, the export-driven industry may experience the effects of the pandemic in retrospect as the current order backlog runs out.
According to Heiskanen, however, the forecast takes into account the possibility of a second wave and the fact that the biggest challenges for the industry may be towards the end of the year.
Overall, Finland's development would appear to be smoother than average: the biggest waves will not be seen in Finland.
- The figures are scarce, but tolerable in the face of fears.
Pasi Kuoppamäki, Chief Economist of Danske Bank, is on the same line.
He believes that Finland's GDP may fall more than Statistics Finland's preliminary figure, but the drop is hardly much larger, at least than in Sweden. So the worst fears don’t seem to come true.
- I would be more inclined to believe that Finland's drop would also be in the 8% range. In Sweden, industry has shrunk more than in Finland, as the car industry, for example, has been at a standstill. Correspondingly, on the service side, Finland has suffered a little more, Kuoppamäki says.
In Sweden, too, the service sector has naturally suffered from the corona. Kuoppamäki refers to payment traffic data, according to which young people have been more active users of services in Sweden than in Finland, but risk groups have been even more cautious than in Finland.
- It has been seen that the economic contraction would be in the same range as in Finland. The figure was not surprising in that respect, although in Finland the drop may be slightly larger.
Like Heiskanen, Kuoppamäki believes that Finland is recovering. For example, domestic consumption is normalizing at a rapid pace.
According to Pasi Kuoppamäki, Chief Economist of Danske Bank, Finland is protected by, among other things, teleworking practices
Photo: Hanna Matikainen / Lehtikuva
If Finland's drop remained at the Swedish level, both would be financially among the winners in the fight against the corona. Kuoppamäki has a theory as to why the Nordic countries survive the economic crunch of the corona less than many other countries.
- The Nordic countries as a whole have fared better than much of the rest of Europe. One reason is our welfare society, which provides reasonable earnings for those made redundant and unemployed, that is, the system can be trusted. The epidemic has also remained under control in the Nordic countries, perhaps with the exception of Sweden, which is on its own. It has allowed society to open up early.
Kuoppamäki reminds that in Italy, for example, industrial production even halved in April. In the Nordic countries, the economy has not closed in a similar way, even during the worst corona peak.
- In the Nordic countries, teleworking practices are also more developed and this has made it possible for work to continue. A smaller explanatory factor is tourism. Of the Nordic countries, tourism money typically flows to the south and less comes here. Now the money has remained domestic, while for tourist-driven countries, the lack of tourism has been a hard hit.