Finland falls back into recession in first quarter

HELSINKI - Finland fell back into recession in the first quarter as its economy contracted by 0.1 per cent from the previous quarter, statistics showed Wednesday.

The figure was however better than analysts had expected, with Nordea bank for example forecasting a gross domestic product decrease of 0.2 to 0.4 per cent.

In the fourth quarter of last year, Finland saw its economy shrink by 0.2 per cent.

After two years of recession in 2012 and 2013 and a year of stagnation in 2014, Finland's growth prospects appear weak.

"Restoring household confidence is a key step, which does not necessarily require any big tricks. A well thought-out government programme and an announcement of a permanent reversal of the tax hikes made in the last few years would be a good start," Nordea economist Pasi Sorjonen said.

Finland's future prime minister Juha Sipila, whose Centre Party won April 19 legislative elections, is expected to present his new cabinet soon, after recently announcing that he would form a government with the right-wing eurosceptic Finns Party and the conservative National Coalition Party.

Sipila vowed during the election campaign to relaunch Finland's ailing economy with liberal reforms, after dramatic declines in the two pillars of the country's economy, the forestry sector and technology industry.