Gross domestic product fell by 2.8 cent in 2020

According to Statistics Finland’s preliminary data, the volume of Finland’s GDP fell by -2.8 per cent in 2020. The fall became slightly revised from February’s quarterly national accounts as the data on general government finances were updated (was -2.9 per cent). Households' saving rate grew in 2020.

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

Households' saving rate grew as a result of corona – disposable income increased slightly and consumption expenditure fell clearly

Wages and salaries received by households fell in nominal terms by 0.4 per cent to EUR 92.8 billion. In the previous year, wages and salaries went up by 3.5 per cent. Received social benefits other than social transfers in kind increased by 5.4 per cent to EUR 47.6 billion. This was particularly due to the 2.6 per cent growth in employment pensions paid to EUR 29.4 billion and the 38 per cent growth in unemployment benefits paid to EUR 5.0 billion.

Households' saving rose to EUR 6.9 billion (EUR 1.0 billion in 2019). This was affected by the 0.5 per cent growth in disposable income to EUR 133.1 billion and by the 4.6 per cent decrease in consumption expenditure to EUR 115.2 billion. Saving grew faster than disposable income as consumption expenditure fell clearly. As a result, households' saving rate grew to 5.7 per cent in 2020. According to preliminary data, households’ indebtedness rate rose to 133 per cent in 2020 having been 129 per cent in 2019.

Adjusted disposable income of households also includes welfare services, i.e. services produced by general government and organisations for households. This adjusted disposable income grew at current prices by 1.0 per cent and in real terms, that is, adjusted for price changes by 0.3 per cent in 2020.

General government deficit grew by over EUR ten billion

The financial position, or net lending, of general government showed a deficit of EUR 12.9 billion. In the previous year, the deficit was EUR 2.4 billion. General government deficit was boosted by expenditure related to the corona pandemic and the decrease in the accrual of tax revenue and social security contributions, the main individual items of which were reductions in corporation taxes and employment pension contributions. In 2020, the deficit was 5.4 per cent relative to GDP. Statistics Finland will publish the deficit and debt data to be reported to the European Commission on 21 April.

General government surplus / deficit by sector (EUR million) relative to GDP (per cent)

The deficit of central government was EUR 13.4 billion, while one year before it was EUR 2.7 billion. According to preliminary data, local government (municipalities and joint municipal authorities, etc.) was in surplus after a long time, EUR 175 million. Central government contributed to the costs of the corona pandemic in local government and the deficit of local government turned into surplus as central government transfers to local government grew.

The surplus of employment pension schemes contracted considerably as dividend income and received social security contributions decreased, to around EUR 429 million. The surplus does not include holding gains in assets. The financial position of other social security funds also weakened, being EUR 158 million in deficit.

Revision of quarterly national accounts

In connection with the March release, we have also updated the database tables of quarterly national accounts in accordance with the European revision policy. Compared with February, the data have partly become revised especially as concerns general government finances and the rest of the world.

Source: National Accounts 2020, premilinary data. Statistics Finland

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

Head of Department in charge: Katri Kaaja

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Appendix tables

Appendix table 1. Gross domestic product (GDP) 1975-2020* (15.3.2021)
Appendix table 2. Revision of annual volume change, % (15.3.2021)

Updated 15.3.2021

Referencing instructions:

Official Statistics of Finland (OSF): Annual national accounts [e-publication].
ISSN=1798-0623. 2020. Helsinki: Statistics Finland [referred: 21.11.2024].
Access method: http://www.stat.fi/til/vtp/2020/vtp_2020_2021-03-15_tie_001_en.html