(Bloomberg) -- Finland's economy grew at its fastest pace in more than seven years in the first three months of 2017 as a pick up in exports begins to fuel the economy of the euro's only Nordic member.
Gross domestic product expanded 1.2 percent from the previous three-month period, when it grew a revised 0.6 percent, Statistics Finland said in a statement. Growth was seen at 1 percent in a survey of analysts by Bloomberg. GDP expanded an annual 2.7 percent.
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"The Finnish economy is now growing faster than the euro area average and is catching up," said Pasi Kuoppamaki, Danske Bank A/S' chief economist in Helsinki. The growth is “now strong enough to boost employment," he said.
After years of stagnation, in which it was referred to as the new "sick man of Europe," Finland is solidifying its recovery, with exports now flanking consumer spending as an engine of growth. Record-high consumer confidence, an expanded workforce and abundant order books in industry are all telling the tale of a lost decade that's now coming to an end.
Exports rose 5 percent in the first quarter, the statistics office said. Investments increased 3.9 percent, while private consumption rose 1.5 percent.
Finnish Prime Minister Juha Sipila has fed a bitter pill to the labor unions, hammering through structural reforms to cut labor costs in a bid to make the country's companies more competitive. Finance Minister Petteri Orpo said in an interview in April that improving growth may allow the government to avoid further austerity.
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While the Finnish economy appears buoyant and forecasts for this year may be raised in light of latest data, economists are warning of clouds gathering on the horizon, with the growth rate likely to slow down again in 2018.
To contact the reporters on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net, Raine Tiessalo in Helsinki at rtiessalo@bloomberg.net.
To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Nick Rigillo
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