Helsinki, Mar 1 (IANS): Despite Finland's gross domestic product (GDP) increasing by 2 per cent year-on-year in 2022, the country's statistical department said that the Nordic nation has entered a recession, as GDP change was negative during the last two quarters of the year.

"GDP has turned downward, meaning that the technical definition of a recession is fulfilled. Finland is in recession in light of these data," Xinhua news agency quoted Samu Hakala, head of Statistics Finland, as saying on Tuesday.

The GDP decreased by 0.1 per cent in the third quarter and by 0.6 per cent in the fourth quarter from the previous quarters respectively.

In the fourth quarter of 2022, private consumption decreased by 0.6 per cent from the previous quarter, while government consumption expenditure decreased by 1.2 per cent.

Meanwhile, investment decreased by 2.0 per cent.

The Ukraine-Russia war and high inflation rate weakened both consumers' and entrepreneurs' confidence in the future, Statistics Finland noted.

In the second half of 2022, GDP and private consumption started to decline, it said.

In the whole of 2022, the volume of exports grew by 1.5 per cent and that of imports by 7.4 per cent, and investment increased by 5.8 per cent.

According to Jukka Appelqvist, chief economist of the Central Chamber of Commerce, a year's worth of economic growth in Finland has practically been wiped out, as a result of the latest economic crisis.

"The reading sounds good, but it only reflects the so-called growth legacy and the recovery from the Covid-19 at the beginning of the year," said Appelqvist.

The economic crisis that started with the Ukraine war has been marked by a gradual deterioration of the economic situation, driven by high inflation and tightening monetary policy, he said.

"There is still no talk of a collapse," the chief economist said, adding that he estimated that the slump would continue for several more months.