Finland

Capital: Helsinki

Local time:
It is %T:%M %A in Helsinki

GDP growth rate: 2.1% in 2013

FDI stock: 82 706 million USD in 2010

Economic trends

Often used as an example for its economic performances and its competitiveness and innovative successes, Finland is one of the countries in the euro zone which has been hit the hardest by the crisis of 2008/2009, due to a collapse of exports. After shrinking by 8% In 2009, the economy rebounded, driven by the processing industry and semi-furnished goods stimulated by both foreign and domestic demand. After it grew by an estimated 3% in 2011, it is expected to shrink by 1% in 2012 due to the recession in the eurozone.

The global financial crisis and the stimulus measures had a profound and durable impact on public finances and debt levels. The main obstacle which the government now must deal with is therefore to combine measures to promote growth and measures allowing for the rebalancing of accounts. The new governmental coalition has decided to implement a program of reduction of public spending and a tax increase. In the more long-term perspective, the aging population is also a source of future pressure on spending. Structural reforms focused on increasing productivity and employment offer are therefore necessary.

Its GDP being among the highest in the world, Finland offers a high living standard. The distribution of wealth is fair, however, social inequalities have risen in the recent years. Affected by the crisis, the unemployment rate has also increased considerably, reaching around 7.9% today.

Main branches of industry

Agriculture represents less than 3% of the current Finnish GNP and employes less than 5% of the population. Because of the unfavorable climate, agricultural development is limited to the maintainace of a certain level of self-sufficiency in basic products. Cereal production dominates, well ahead of milk production and animal husbandry. Finland's accession to the EU has further accelerated the process of restructuring and downsizing of this sector.

Forestry is traditionally well-developed: Finland exports a rich variety of products randing from simple wooden products to high-tech tags and labels and including paper, cardboard, packaging etc. Other key industrial sectors are metal production, mechanical engineering and electronic goods. Finland specializes in exporting information and communication technologies, Nokia becoming the world leading manufacturer of mobile handsets.

The service sector employs almost 70% of the population and accounts for almost 65% of the GDP.

International trade

Finland is a highly industrialized country, whose economy relies heavily on exports (40% of the GNP) and whose trade accounts for roughly 85% of the GDP (2008-2010 average).

As an effect of the global economic crisis, the country experienced an unprecedented fall in foreign trade, exports decreasing by 32% and imports by 31%. The recovery in 2010 has been slow. Long-term structurally positive, the country's trade balance deteriorated and in 2011 it became a deficit, since imports rose to their pre-crisis level while exports grew more slowly.

The country's main trading partners are Germany, Russia, Sweden, China and the United States.