Finland’s GDP plummeted by as much as 8½%, which was considerably more than in 1991 – during the worst year of Finland’s previous economic crisis. The dive in aggregate demand in the global economy also affected prices, and in several countries inflation even slipped into negative territory for some time.
However, the severe economic downturn did not affect people’s everyday lives to the extent one might assume on the basis of the GDP figures, at least not at the beginning. Private demand was maintained by lower interest rates and the increasing government budget deficits, despite the strong decline in exports and industrial output.