28 February 2003
Inquiries: National Accounts: Mr Tuomas Rothovius
+358 9 1734 3360, Mr Olli Savela +358 9 1734 3316
General Government Deficit and Debt: Ms Paula Koistinen-Jokiniemi
+358 9 1734 3362, skt.95@stat.fi
Director in charge: Mr Ari Tyrkkö
Gross domestic product grew by 1.6 per cent last year
According to Statistics Finland's preliminary data, the volume of Finland's gross domestic product grew by 1.6 per cent in 2002. The growth was slightly greater than in the previous year, but remained modest if compared to the final years of the 1990s. Gross domestic product, or the combined value added of the goods and services produced, totalled EUR 140 billion last year.
During the last quarter of the year, GDP increased by 0.7 per cent from the previous quarter. In the January to March period, output contracted by 0.3 per cent from the end of the previous year. In the second quarter of the year GDP grew by 1.8 per cent from the previous quarter and in the third quarter output increased by 0.5 per cent.
Volume changes of GDP in 1996-2002, %
Growth in demand hinged on net exports and on both private and public consumption last year. As distinct from the years before, private investments did not increase demand in the national economy.
Private final consumption expenditure rose by 2.1 per cent last year. In the early part of the year consumption was still curbed by reservations concerning car purchases, but households' car buying began to liven up from the spring onwards. Purchases of durable consumer goods went up by over 6 per cent last year, having still contracted by three or so per cent in the year before. The volume of government consumption expenditure increased by 4 per cent.
Investments contracted by one per cent. Investments in machinery, equipment and transport equipment only grew by barely one per cent. Investments in residential buildings diminished by 1.5 per cent and the construction of other buildings decreased by 5 per cent when compared to the previous year. Government investments increased by 7 per cent.
The volume of exports of goods and services grew by 5.6 per cent but because export prices fell by more than this, the value of exports fell short of that of the previous year. The volume of imports grew by 1.7 per cent, but because import prices fell, the value of imports also remained below the previous year's value.
Output increased in the service industries by almost 2 per cent last year. In the manufacturing industries output went up by one per cent while in construction it contracted by over one per cent. Output went up by 2 per cent in primary production where forestry production increased more than agricultural production.
Enterprises' operating surplus improved slightly
Enterprises' profits increased slightly from the year before. Enterprises' operating surplus grew by 1.5 per cent and was EUR 22 million. Operating surplus is roughly equivalent to operating profit in business bookkeeping. Direct taxes paid by enterprises totalled good EUR 5 billion, which was 3 per cent more than in the year before. Enterprises paid 4 per cent less in dividend than in the previous year, or good EUR 7 billion altogether. Enterprises' fixed investments decreased by one per cent last year. Enterprises' net lending, which describes their financial position, was EUR 5.6 billion in surplus. In the previous year, the surplus was EUR 6.2 billion.
The net interest income of financial institutions fell by 10 per cent from the previous year, as cuts in interest rates narrowed interest margins. In contrast, insurance institutions improved their financial position. The total net lending of financial and insurance institutions showed a deficit of EUR 0.3 billion, whereas their deficit in the previous year was EUR 1.4 billion.
Households' real income grew by 2.1 per cent
The disposable income of households grew by 3.8 per cent in nominal terms and by 2.1 per cent in real terms last year. The increase in the households' gross income was mostly attributable to the good 3 per cent wage sum growth, which primarily resulted from risen level of earnings. Households' entrepreneurial income went up by good 8 per cent. Households received 4 per cent more social security benefits, of which pension and unemployment security payments increased up by 6 per cent from the previous year. Dividend income received by households decreased by good 8 per cent.
In nominal terms, the final consumption expenditure of households grew by 3.8 per cent, i.e. by as much as their disposable income. The savings rate was -0.3 per cent. Net lending of households showed a deficit of EUR 1.5 billion.
General government surplus 4.7 per cent of GDP
The financial position of central government showed a surplus for the third consecutive year last year. The surplus was EUR 2.4 billion, or slightly down on the year before. The surplus contracted because expenditure grew more than income.
The financial position of local government did not change from the year before and showed a deficit of EUR 0.4 billion. The financial surplus of social security funds was EUR 4.7 billion, or of the same magnitude as in 2001.
State's revenues from direct taxes increased by 5 per cent. Revenues from indirect taxes decreased by 0.5 per cent, if the value added tax paid by local government is not taken into account. Municipalities' revenues from taxes remained at the previous year's level. Enterprises paid just under 3 per cent more corporate tax and households good 2 per cent more income tax than in 2001.
The total net lending of general government, or the so called EMU surplus, was 4.7 per cent of GDP, whereas in the previous year it was 5.1 per cent of GDP. At the end of the year, the consolidated gross debt of general government, or so called EMU debt, was 42.7 per cent of GDP, having been 43.8. per cent at the end of the previous year.
The tax rate, or the proportion of taxes and statutory social security contributions of GDP, was 45.2 per cent last year, as compared to 46 per cent in the year before. An estimated one half of a percentage point of this reduction in the tax rate came from technical revisions made to the recording of local government's value added tax payments.
The proportion of public expenditure of GDP was 49.2 per cent, as compared to 49 per cent in the previous year.
Sources: National Accounts, Preliminary Data, 2002
and 4th Quarter. Statistics Finland
General Government Deficit and Gross Debt According to EMU
Criteria. Statistics Finland