Finland has a highly industrialized, largely free-market economy with per capita GDP almost as high as that of Austria and the Netherlands and slightly above that of Germany and Belgium. Trade is important, with exports accounting for over one-third of GDP in recent years. The government is open to, and actively takes steps to attract, foreign direct investment.
Finland is historically competitive in manufacturing, particularly in the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in export of technology as well as promotion of startups in the information and communications technology, gaming, cleantech, and biotechnology sectors. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the cold climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export industry, provides a secondary occupation for the rural population.
Finland had been one of the best performing economies within the EU before 2009 and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in that year, causing Finland’s economy to contract from 2012 to 2014. The recession affected general government finances and the debt ratio. The economy returned to growth in 2016, posting a 1.9% GDP increase before growing an estimated 3.3% in 2017, supported by a strong increase in investment, private consumption, and net exports. Finnish economists expect GDP to grow a rate of 2-3% in the next few years.
Finland's main challenges will be reducing high labor costs and boosting demand for its exports. In June 2016, the government enacted a Competitiveness Pact aimed at reducing labor costs, increasing hours worked, and introducing more flexibility into the wage bargaining system. As a result, wage growth was nearly flat in 2017. The Government was also seeking to reform the health care system and social services. In the long term, Finland must address a rapidly aging population and decreasing productivity in traditional industries that threaten competitiveness, fiscal sustainability, and economic growth.
Except for timber and several minerals, Finland depends on imported raw materials, energy, and some components for its manufactured products. Farms tend to be small, but farmers own sizable timber stands that are harvested for supplementary income in winter. The country's main agricultural products are dairy, meat, and grains. Finland's EU accession has accelerated the process of restructuring and downsizing of this sector.
|GNI, Atlas method (current US$) (billions)||129.67||136.94||266.03||275.34|
|GNI per capita, Atlas method (current US$)||26,000||26,450||49,600||49,780|
|GNI, PPP (current international $) (billions)||88.88||137.78||211.64||284.27|
|GNI per capita, PPP (current international $)||17,820||26,620||39,460||51,400|
|GDP (current US$) (billions)||141.44||125.71||249.18||269.59|
|GDP growth (annual %)||0.7||5.8||3.2||-2.8|
|Inflation, GDP deflator (annual %)||5.2||1.6||0.3||1.2|
|Agriculture, forestry, and fishing, value added (% of GDP)||5||3||2||2|
|Industry (including construction), value added (% of GDP)||29||32||26||24|
|Exports of goods and services (% of GDP)||22||42||38||36|
|Imports of goods and services (% of GDP)||24||33||37||36|
|Gross capital formation (% of GDP)||30||24||22||24|
|Revenue, excluding grants (% of GDP)||29.6||40.1||35.3||36.7|
|Net lending (+) / net borrowing (-) (% of GDP)||1||6.7||-2.3||0.3|
|States and markets|
|Time required to start a business (days)||..||31||17||13|
|Domestic credit provided by financial sector (% of GDP)||..||..||..||..|
|Tax revenue (% of GDP)||24.4||24.2||18.6||20.7|
|Military expenditure (% of GDP)||1.6||1.2||1.5||1.5|
|Mobile cellular subscriptions (per 100 people)||5.2||71.9||156.4||128.5|
|Individuals using the Internet (% of population)||0.4||37.2||86.9||92.2|
|High-technology exports (% of manufactured exports)||..||..||13||10|
|Statistical Capacity Score (Overall Average) (scale 0 - 100)||..||..||..||..|
|Merchandise trade (% of GDP)||38||64||56||50|
|Net barter terms of trade index (2000 = 100)||..||100||91||90|
|External debt stocks, total (DOD, current US$) (millions)||..||..||..||..|
|Total debt service (% of exports of goods, services and primary income)||..||..||..||..|
|Net migration (thousands)||47||32||81||70|
|Personal remittances, received (current US$) (millions)||63||473||894||813|
|Foreign direct investment, net inflows (BoP, current US$) (millions)||812||13,502||12,221||-2,369|
|Net official development assistance received (current US$) (millions)||..||..||..||..|