Finland: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 241.33 | 239.18e | 270.55 | 285.31 | 295.83 |
| GDP (Constant Prices, Annual % Change) | -8.2 | 3.6e | 3.5e | 2.2 | 2.1 |
| GDP per Capita (USD) | 45,096 | 44,496e | 50,090 | 52,568 | 54,244 |
| General Government Balance (in % of GDP) | 0.9 | -0.3 | 0.7 | 1.2 | 0.7 |
| General Government Gross Debt (in % of GDP) | 43.3 | 48.4 | 50.2 | 50.3 | 51.0 |
| Inflation Rate (%) | 1.6 | 1.7e | 3.1e | 2.0 | 2.0 |
| Unemployment Rate (% of the Labor Force) | 8.2 | 8.4 | 7.8 | 7.6 | 7.5 |
| Current Account (billions USD) | 5.60 | 7.40e | 6.74 | 7.14 | 7.10 |
| Current Account (in % of GDP) | 2.3 | 3.1e | 2.5 | 2.4 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
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.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 4.6 | 23.9 | 71.1 |
| Value Added (in % of GDP) | 2.7 | 28.2 | 69.2 |
| Value Added (Annual % Change) | -0.6 | -16.3 | -3.9 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
See the Country Risk Analysis Provided By Ducroire.
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.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 81,704 | 91,781 | 60,890 | 68,095 | 83,696 |
| Exports of Goods (million USD) | 90,025 | 96,456 | 62,855 | 69,264 | 78,734 |
| Imports of Services (million USD) | 22,613 | 30,377 | 25,636 | 27,595 | 26,301 |
| Exports of Services (million USD) | 23,167 | 31,772 | 27,482 | 27,689 | 25,986 |
| Imports of Goods and Services (Annual % Change) | 7.0 | 6.5 | -18.1 | - | - |
| Exports of Goods and Services (Annual % Change) | 4.8 | - | - | - | - |
| Imports of Goods and Services (in % of GDP) | 40.7 | 43.0 | 34.9 | - | - |
| Exports of Goods and Services (in % of GDP) | 45.8 | 47.0 | 37.4 | - | - |
| Trade Balance (million USD) | 12,503 | 10,210 | 4,790 | 4,404 | - |
| Trade Balance (Including Service) (million USD) | 13,182 | 11,700 | 6,035 | 7,258 | - |
| Foreign Trade (in % of GDP) | 86.6 | 89.9 | 72.3 | - | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Sweden | 11.4% |
| Germany | 10.1% |
| Russia | 9.0% |
| United States | 7.0% |
| Netherlands | 6.8% |
| See More Countries | 55.8% |
| Main Suppliers (% of Imports) |
2010 |
| Russia | 17.8% |
| Germany | 13.3% |
| Sweden | 10.1% |
| China | 7.3% |
| Netherlands | 5.4% |
| See More Countries | 46.0% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Map of freedom 2010
Source: Freedom House
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012