Finland: Economy rebounds in Q4 2025
Downwardly revised reading undershoots market expectations: Finland’s GDP grew by 0.3% on a seasonally adjusted quarter-on-quarter basis in Q4, rebounding from a 0.1% contraction in the previous quarter. While this marked the strongest expansion since Q3 2024 and outpaced the Euro Area’s 0.2% average, the result fell short of both the preliminary estimate (0.6%) and market expectations.
On a calendar-adjusted year-on-year basis, GDP expanded 0.5% in Q4, following a 0.1% contraction in the previous quarter.
In 2025 as a whole, GDP growth slowed to 0.2% from 0.4% in 2024, remaining below the average of the past decade.
Private consumption and investment drive growth: Relative to the previous period’s data, readings in Q4 improved for private consumption (+0.4% in seasonally adjusted quarter-on-quarter terms vs +0.3% in Q3) and fixed investment (+1.7% vs +0.1% in Q3). Despite a sluggish construction sector, all investment categories grew toward year-end, supported by data centers, stabilizing housing construction, and robust growth in R&D. In contrast, readings worsened for government consumption (-0.6% vs +1.5% in Q3), imports of goods and services (-0.9% vs +3.0% in Q3) and exports of goods and services (-3.4% vs +3.1% in Q3). The sharp drop in exports was due to a high base effect caused by the delivery of a large ship in Q3.
GDP growth to pick up in 2026: Our Consensus is for quarter-on-quarter GDP growth to remain steady in Q1 2026, a projection supported by strong monthly growth in economic activity and goods exports in January.
After a marginal increase in 2025, our consensus is for Finland’s economy to record its strongest expansion in five years in 2026. While rising incomes and recent wage agreements will support a recovery in private spending, momentum will likely be tempered by weak residential investment and fiscal consolidation.