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flag Finland Finland: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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 2009201020112012 (e)2013 (e)
GDP (billions USD) 241.33239.18e270.55285.31295.83
GDP (Constant Prices, Annual % Change) -8.23.6e3.5e2.22.1
GDP per Capita (USD) 45,09644,496e50,09052,56854,244
General Government Balance (in % of GDP) 0.9-0.30.71.20.7
General Government Gross Debt (in % of GDP) 43.348.450.250.351.0
Inflation Rate (%) 1.61.7e3.1e2.02.0
Unemployment Rate (% of the Labor Force) 8.28.47.87.67.5
Current Account (billions USD) 5.607.40e6.747.147.10
Current Account (in % of GDP) 2.33.1e2.52.4-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

Note: (e) Estimated Data

Main Sectors 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.

 
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.

 
 
 
 
Learn more about Market Analyses about Finland on Globaltrade.net, the Directory for International Trade Service Providers.
 

Indicator of Economic Freedom

Score:
74.0/100
Position:
Mostly free
World Rank:
17/179
Regional Rank:
8/42

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.

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

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 20072008200920102011
Imports of Goods (million USD) 81,70491,78160,89068,09583,696
Exports of Goods (million USD) 90,02596,45662,85569,26478,734
Imports of Services (million USD) 22,61330,37725,63627,59526,301
Exports of Services (million USD) 23,16731,77227,48227,68925,986
Imports of Goods and Services (Annual % Change) 7.06.5-18.1--
Exports of Goods and Services (Annual % Change) 4.8----
Imports of Goods and Services (in % of GDP) 40.743.034.9--
Exports of Goods and Services (in % of GDP) 45.847.037.4--
Trade Balance (million USD) 12,50310,2104,7904,404-
Trade Balance (Including Service) (million USD) 13,18211,7006,0357,258-
Foreign Trade (in % of GDP) 86.689.972.3--

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

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

 

Main Products

Main Exports
(% of Exports)
2010
Paper and paperboard, coated on one or both sides...Paper and paperboard, coated on one or both sides with kaolin "china clay" or other inorganic substances, whith or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or in square or rectangular sheets, of any size (excl. all other coated papers and paperboards) 7.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.3%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 3.5%
Flat-rolled products of stainless steel, of a...Flat-rolled products of stainless steel, of a width of >= 600 mm, hot-rolled or cold-rolled "cold-reduced" 3.5%
Uncoated paper and paperboard, of a kind used for...Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch-cards and punch tape paper, in rolls or in square or rectangular sheets, of any size, and hand-made paper and paperboard (excl. newsprint of heading 4801 and paper and paperboard of heading 4803) 3.0%
See More Products 75.3%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 9.6%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 3.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.6%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 2.5%
See More Products 77.8%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Ministry of Employment and the Economy
Ministry of Agriculture and Forestry
Ministry for Foreign Affairs
Statistical Office
Statistics Finland
Central Bank
Bank of Finland
Stock Exchange
OMX Helsinki Stock Exchange
Search Engines
Kolumbus
Sonera Plaza
Web Studio
http://www.fi
Economic Portals
Finnguide

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Political Outline

Executive Power
President of Finland is the head of state, leads the foreign policy, and is the Commander-in-Chief of the Defense Forces. The main executive power lies in the cabinet appointed and headed by the prime minister. Before the constitutional rewrite, which was completed in 2000, the president enjoyed more power.
Legislative Power
Legislative power is vested in the Parliament of Finland (Eduskunta), and the government has limited rights to amend or extend legislation. The president has the power of veto over parliamentary decisions although it can be overrun by the parliament.
Main Political Parties
Finland has a multi-party system where a single party does not have chance to gain power alone; so parties work with each other to form coalition governments. The main political parties in the country are:
- Center Party (Suomen Keskusta) – a centrist political party, traditionally representing rural interests having strong political influence in small municipalities;
- National Coalition Party (Kansallinen Kokoomus) – a right-wing party draws its major support from business community and urban professionals;
- Social Democratic Party (Suomen Sosiaalidemokraattinen Puolue, SDP) – follows social-democratic ideology, draws its major support from country's working class;
- Greens (Vihreät) - advocates environmental interests;
- The Swedish People's Party (SFP) (in Finnish) – a moderate liberal party of Swedish speaking minority.
Current Political Leaders
President: Sauli NINISTO (since 1 March 2012) – National Coalition Party
Prime Minister: Jyrki KATAINEN (since 22 June 2011) - National Coalition Party (Kansallinen Kokoomus)
Next Election Dates
Presidential: February 2018
 

Indicator of Freedom of the Press

World Rank:
1/179
Evolution:
same place compared to 2010

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.).

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
1/7

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