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Published: 20 September 2019

Gross domestic product grew by 1.7 per cent in 2018

According to Statistics Finland’s data, the volume of Finland’s GDP grew by 1.7 per cent in 2018. Growth also amounted to 1.7 per cent in the previous calculation round in June. The entire national accounts time series has been updated starting from 1975. This does not have much effect on the annual volume changes in GDP but the revisions increase the level of value added, especially in the 2010s.

Annual change in the volume of gross domestic product, per cent

Gross domestic product, or the value added created in the production of goods and services, amounted to EUR 234 billion in 2018. The value of GDP increased by EUR 2.4 billion in 2018 compared to the data published in June and by around EUR one to two billion per year over the entire period 2010 to 2018. The level was raised by coverage revisions made to output. Time series revisions are made regularly in national accounts every five years just like in other EU countries. They maintain the timeliness and international comparability of national accounts.

Value added

Compared to the data published in June, the 2018 current-priced value added increased by EUR 2.4 billion to EUR 202 billion. The value added of 2017 increased by EUR 1.9 billion. This increase was mainly due to coverage revisions made in services. Similar revisions have been made throughout the 2010s and for some items even longer.

For example, items related to financing and insurance, as well as grey and illegal economy have been added to the revised time series.

In the financial sector, value added growth was affected by other operating income being added to output, and in operations serving financing, by revisions to output and intermediate consumption.

Time series revisions have also been made to the levels of housing and construction.

Output and intermediate consumption

In connection with the time series revision, changes have also been made that affect output and intermediate consumption considerably but not value added. These changes directed at housing and local government lower output and intermediate consumption by as much and, thus, do not change value added at current prices. Value added is calculated as the difference between output and intermediate consumption.

Energy consumption included in intermediate consumption and output of housing has in the time series revision been transferred to households' consumption expenditure. The revision affects the internal division of households' consumption expenditure (between rents and energy) but not the level. In future, rents are so-called cold rents, which is a uniform practice with other EU countries. It is also in line with the current recording method in environmental accounts.

Internal items of local government have been eliminated for 2004 to 2014. These items include health care joint municipal authorities’ internal purchases and sales that, after elimination, lower the market output and intermediate consumption of local government. These items have also been included in general government’s total income and expenditure, so the elimination also lowers these. The eliminations directed at these items are of similar magnitude, so the eliminations do not affect the the deficit of general government.

Investments

The level of investments increased by EUR 2.9 billion or some five per cent in 2018. The level revision did not have much effect on the annual changes in investments. In 2018, the volume of investments rose by 3.3 per cent from the year before.

The main revisions in investments were made to the levels of building construction investments. The revisions were related to corrections in the output of building construction. The levels of civil engineering investments and machinery investments were also raised in connection with the time series revision.

Private consumption expenditure

The time series of households’ consumption expenditure was now revised based on the results of the 2016 Household Budget Survey. Consideration of the results of the Household Budget Survey affected the time series of households’ consumption expenditure so that the total level decreased slightly. Other time series revisions that mainly concerned housing and the insurance sector were also made in households’ consumption expenditure.

In connection with the time series revision, a classification revision that affects the calculation level was also made in households’ consumption expenditure, the revision raises the number of categories that are calculated.

International

The definition change connected to factoryless production was now extended to 1999 to 2005. This decreased the level of service exports and increased the level of goods exports for these years but did not affect the level of total exports. This change has already earlier been made for more recent years.

As a result of the time series revision, the time series of national accounts and balance of payments have been harmonised. In this context, some changes have been made to international trade figures. For example, the treatment of project deliveries has changed, which lowers the levels of service exports and imports but does not affect net exports.

More detailed information was received on some large company restructuring. These data affect the property income paid from and received by Finland. The time series of income received from investment funds has also been revised to correspond with new source data. This revision increased the property income paid to Finland.

Property income items from abroad to Finland and from Finland to abroad do not affect GDP but they are considered in the gross domestic income.

Changes in these statistics

The time series revision in autumn 2019 does not include fundamental revisions but as a result of the revisions the data of the national accounts better describe the structure of the economy and changes in it.

Source: National Accounts 2018, Statistics Finland

Inquiries: Tapio Kuusisto 029 551 3318, Jarkko Kaunisto 029 551 3551, kansantalous@stat.fi

Director in charge: Ville Vertanen

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Appendix tables

• Appendix table 1. Gross domestic product (GDP) 1975-2018* (Correction on 9 October 2019) (20.9.2019)
• Appendix table 2. Revision of annual volume change, % (Correction on 2 October 2019) (20.9.2019)

Revisions in these statistics

• Revisions on these statistics (20.9.2019)

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Updated 20.9.2019