Press release 1.3.2011

Gross domestic product grew up by 3.1 per cent in 2010

According to Statistics Finland's preliminary data, the volume of Finland's GDP grew by 3.1 per cent last year. Gross domestic product, or the totalled up value added of the goods and services produced, amounted to EUR 180 billion last year.

In the first quarter, output grew by only 0.2 per cent from the previous quarter, but the 2.7 per cent spurt of growth in the second quarter was a strong signal of the end of the recession. In the third quarter the growth slowed down to 0.4 per cent, but in the fourth quarter activity in the economy picked up again, so that 1.7 per cent more GDP was generated than in the previous quarter. The large fluctuation in the growth percentages for exports and GDP was influenced by the labour dispute in stevedoring in March.

According to the preliminary data compiled by Eurostat, in the fourth quarter of the year GDP in the EU area grew by 0.2 per cent from the previous quarter and by 2.1 per cent from twelve months back.

Changes in volume of GDP from previous quarter, %

Demand was boosted most last year by 5.1 per cent growth in the volume of exports, even though service exports diminished clearly. Investments increased by 0.8 per cent and especially investments in residential buildings picked up: their volume went up by 22.2 per cent. Private consumption increased by 2.6 per cent and public consumption by 0.4 per cent. Imports grew by 2.6 per cent.

Demand grew in the fourth quarter

In the fourth quarter, total demand in the national economy grew by 0.9 per cent from the quarter before. Over the October to December period, the volume of exports grew by 6.6 per cent from the previous quarter. The volume of private consumption went up by 1.0 per cent and public consumption by 0.5 per cent. The volume of investments increased by 0.7 per cent. Inventories diminished. The volume of imports fell by 4.6 per cent.

In the last quarter of the year, value added in manufacturing grew by 5.9 per cent from the previous quarter. Value added in construction grew by 3.4 per cent. In services, value added went up by 0.8 per cent and in trade by 3.1 per cent.

Over the whole of 2010, value added increased by 6.3 per cent in manufacturing and by five per cent in construction. In trade, value added grew by 5.9 per cent and in transport by 5.5 per cent.

Because output grew by more than the number of hours worked, the productivity of labour in the whole national economy improved by two per cent last year.

Non-financial corporations' profits went up again

Non-financial corporations' entrepreneurial income grew by 30 per cent last year but was still clearly lower than in the peak year of 2007. Entrepreneurial income roughly corresponds with profit before payment of taxes and dividends. Non-financial corporations paid 37 per cent more direct taxes but four per cent less dividends than in the previous year.

Non-financial corporations' fixed investments in Finland diminished by five per cent last year. Non-financial corporations' net lending, or financial position, showed a surplus of EUR 9 billion.

General government deficit 2.5 per cent of gross domestic product

The financial position of central government showed a notable deficit for the second successive year last year. The deficit amounted to nearly EUR 10 billion. State revenues from taxes went up by 2.4 per cent. Revenues from indirect taxes grew by 4.4 per cent, but those from direct taxes decreased by 1.3 per cent. Income transfers paid to, for instance, social security funds and municipalities, grew by seven per cent in all.

The deficit of municipalities and joint municipal boards was EUR 0.5 billion or so, or smaller than in the year before. Municipalities' tax revenues went up by 5.4 per cent and final consumption expenditure by 3.3 per cent.

The financial surplus of employment pension funds remained on level with the previous year at around EUR 5 billion. Revenue from pension contributions and property income grew by roughly the same amount as paid pensions.

The deficit defined in the European Union's Growth and Stability Pact totalled 2.5 per cent of GDP. Public debt rose to over EUR 87 billion last year. Its share of GDP stood at 48.4 per cent.

The proportion of public expenditure of gross domestic product was 55.1 per cent. In the previous year, the proportion was 56.3 per cent. The tax rate, or the proportion of taxes and statutory social security contributions of GDP, contracted to 42.2 per cent last year. The tax rate was last this low in 1987.

Households' real income grew by nearly three per cent

Households' disposable income increased last year by 3.8 per cent in nominal terms and by 2.9 per cent in real terms. Households' adjusted disposable income increased by 3.6 per cent in nominal terms and by 2.3 per cent in real terms. Adjusted income also takes into consideration the personal services which organisations and general government produce for households, such as educational, health and social services.

Wages and salaries went up by 1.9 per cent, social security benefits by 4.1 per cent, and property and entrepreneurial income by 6.2 per cent.

Households' final consumption expenditure increased by 3.7 per cent. Consumption expenditure was lower than disposable income, so the savings ratio, or savings relative to disposable income, was 4.5 per cent in the positive. At the end of September, households' indebtedness rate was 113.4 per cent.

Source: National Accounts 2010 (preliminary data) and Quarterly National Accounts 2010, 4th quarter. Statistics Finland
General government deficit and debt 2010 (preliminary data). Statistics Finland
Taxes and tax-like payments 2010 (preliminary data). Statistics Finland. Statistics Finland

Inquiries:
National Accounts: Pasi Koikkalainen +358 9 1734 3332, Olli Savela +358 9 1734 3316, skt.95@stat.fi
General government deficit and debt and taxes: Mika Sainio +358 9 1734 2686, Niina Suutarinen +358 9 1734 3302, rahoitus.tilinpito@stat.fi

Director in charge: Ari Tyrkkö