National economic trends

Updated: 15 Jan 2020
Next update: 14 Feb 2020

The Trend Indicator of Output endeavours to forecast the monthly development of the national economy. The data are in the form of an index. The data have been calculated as original and working day adjusted series for the whole economy and for three main industries. A seasonally adjusted and a trend series are also calculated for the whole economy.

Economic fluctuations are directly reflected in the balance of general government finances. Finland’s long-term objective in general government finances is to maintain and support stable and sustainable economic development, thereby largely avoiding social expenditure cuts and tax increases. The central government fiscal balance and gross debt are the elements of general government where fluctuations in general government finances are most clearly visible. As the economy weakens, the rise in the public sector deficit level is mitigated by taking debt. For this reason, changes in economic conditions are reflected most clearly in the level of the fiscal balance and thus also in fluctuations in central government debt. The goal is to balance the economy by increasing employment, whereby the level of tax revenue also grows and, as a result of falling unemployment, the need to increase general government expenditure also declines.

Among the biggest future challenges of general government finances and economic policy are instability of economic conditions, restructuring pressures on the private sector, and the long-term funding problems of the welfare state. Economic policy problems are linked to the social and structural problems of society. Problems should be examined multisectorally and in parallel, to ensure that efficiency measures achieve sustainable results over both the short and longer term. Operational sustainability should be central to the management of general government finances. Short-term measures to support economic activity should at the same time improve the sustainability of the fiscal balance of general government finances. The social costs of the welfare society may lead to instability and a sustainability gap in general government finances if economic policy does not take account of the effects of the structural problems of society, such as the change in population age structure and the distortion of the economic dependency ratio.


Output of the national economy grew in November

Adjusted for working days, output went up by 2.3 per cent in November 2019 year-on-year. In November, seasonally adjusted output grew by 0.3 per cent from the month before. According to revised data, working-day adjusted output increased in October 2019 by 1.9 per cent (previously 1.5 per cent) from October 2018.

The series of the Trend Indicator of Output are seasonally adjusted with the Tramo/Seats method. The latest observations of the series adjusted for seasonal and random variation (seasonally adjusted and trend series) become revised with new observations in seasonal adjustment methods. Revisions especially at turning points of economic trends may be significant, which should be taken into consideration when using seasonally adjusted and trend data.Working day adjusted primary production grew by around one per cent, secondary production by slightly under five per cent and services by roughly one and a half per cent from November 2018.

Primary production refers to agriculture, hunting, forestry and fishing. Secondary production includes manufacturing and construction. Services comprise trade, hotel and restaurant activities, transport and business activities, as well as real estate, renting and research services, financial intermediation and insurance, and public services.