Volume of gross domestic product fell by 1.2 per cent in 2023

Value added by industry

Finland's GDP development was below the EU average. This is explained by Finland's industry structure and, on the other hand, by the interest rate sensitivity of the Finnish economy.

In total industry (B to E), output at current prices decreased from 2022. The volume of output also fell.

The value and volume of output in construction (F) declined from the previous year. Value added in construction also fell while the fall in output was faster than the fall in intermediate consumption. The weak development in the volume of construction was particularly due to the slowdown of newbuilding.

Constant-price value added in financial intermediation and insurance activities (K) and accommodation and food service activities (I) was growing rapidly. The growth in the financial sector was explained by the positive impact of higher interest rates on banking. The growth in accommodation and food service activities was partly a return to normal after the coronavirus.

Employment and wages

The development of employed persons and hours worked slowed down in 2023. The number of employed persons grew by 0.8 per cent from 2022. Among the industries, the number of persons employed and hours worked made a downturn especially in construction.

The number of hours worked in the whole economy grew by 0.3 per cent. The wages and salaries sum of the whole economy increased by 4.9 per cent in 2023.

Investments

The value of investments went down in 2023. The fall was especially due to the strong slowdown of newbuilding. The volume of investments in residential buildings was falling sharply. A corresponding decline was last seen during the financial crisis.

The value of investments in wind power included in other structures was also falling in 2023. The fall in the value was affected by the record high investments in wind power in the comparison year 2022.

Private consumption

More money than in the previous year was used on private consumption in 2023, but the growth in the amount of money was close to the rise in prices of private consumption. Thus, the volume of purchased goods and services remained on level with 2022.

Households' saving rate was negative. The saving is derived by deducting consumption expenditure from disposable income. The saving is negative if households' disposable income is lower than households' consumption expenditure. The saving rate refers to the share of households’ savings in disposable income.

Current account deficit contracted in 2023

The current account showed a deficit of EUR 3.0 billion in 2023. However, the deficit diminished from the year before as net exports of goods and services improved by EUR 5.7 billion. Net exports were supported especially by the fall in euro-denominated imports of energy products.

The balance of services weakened and showed a deficit of EUR 10.0 billion. The deficit of the balance of services is highest in the review history.

General government deficit almost EUR 8 billion — central government and local government clearly in deficit

The financial position, or net lending, of general government showed a deficit of EUR 7.9 billion in 2023. In the previous year, the deficit was EUR 1.4 billion. The growth in deficit was affected, for example, by decreased accruals of value added tax and other taxes on products, growth in wages and salaries paid, and expenditure related to wellbeing services counties.

In 2023, the deficit was 2.9 per cent relative to GDP.

The deficit of central government was EUR 8.9 billion, while one year before it was EUR 4.2 billion. This was affected, for example, by a drop in tax accrual, rising wages and salaries paid and current transfers to wellbeing services counties.

After the release of preliminary data in March, the interpretation of the capital loan of EUR 400 million in 2022 to 2023 was changed. The transaction was originally interpreted as a capital transfer (central government expenditure in 2022) and its repayment (central government revenue in 2023). According to the new interpretation, the transaction must be treated as a financial transaction that does not affect central government's net lending in either year. For 2023, the changed interpretation thus weakens net lending, and this change is visible in the figures published now. For 2022, this revision will be visible in the September release, when the net lending of 2022 improves correspondingly.

Interest rates paid by central government grew faster than interest rates received. In national accounts, payment flows resulting from swap arrangements of central government debt interests are not recorded in interests.

The decrease in the accrual of value added tax was affected by the temporary reductions in the value added tax on electricity in force last year. The fall in other taxes on products was especially explained by a drop in the accrual of asset transfer taxes. This was caused, for example, by a decrease in dwelling transactions. The group of other taxes on products consists of several taxes. The accrual of motor vehicle tax also diminished.

The deficit of local government, excluding wellbeing services counties, grew from the previous year, being EUR 1.3 billion. The deficit of wellbeing services counties included in the annual national accounts for the first time was EUR 1.7 billion. The non-recurring compensation of EUR 0.5 billion paid to wellbeing services counties in January 2024, adjusting the funding for 2023, was recorded as revenue for wellbeing services counties and as expenditure for central government for the statistical reference year 2023.

National accounts time series will become revised in the autumn

Statistics Finland will publish revised time series of national accounts and balance of payments statistics in September 2024. As a result of the time series revision, the figures will become revised starting from 2010. Revised national accounts data will be released on 18 September 2024. At the same time, the database tables of quarterly national accounts are updated.

More information is available in the news item.

National Accounts' table package

The table package combining national accounts data is available in PDF/A format in Finnish and English. The table package is updated in connection with each annual national accounts release.