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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. In 2008, the GDP growth rate slowed down significantly, well below the estimated 2.7%. The gross national product dropped considerably in the second quarter of 2009, compared to the same period in 2008, and the country went into recession. In Parallel, the unemployment rate increased considerably to reach today's 9% levels. Inflation, on the other hand, has remained under control.
At the end of 2008, the annual rise in consumer prices exceeded the 2% mark for the first time in five years. Nearly half of this overall rise comes from increased housing costs and higher interest rates. The government budget is expected to show a 3% GDP deficit for the 2009 and 2010 activities.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	209.71	246.25	273.98e	233.56e	232.13
GDP (constant prices, annual % change)	4.9	4.2	0.9	-5.2e	-1.2e
GDP per capita (USD)	39,820	46,836	51,989e	44,217e	43,845e
General government balance (in % of GDP)	3.9	5.2e	4.1	-1.6e	-3.4e
Inflation rate (%)	1.3	1.6	3.9e	1.0e	1.1e
Unemployment rate (% of the labor force)	7.7	6.8	6.4	8.5	9.3
Current Account (billions USD)	9.43	10.01	6.92	2.32	1.28e
Current Account (in % of GDP)	4.5	4.1	2.5	1.0	0.6

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Main sectors of industry

Agriculture represents less than 3% of the current Finnish GNP. Because of the climate, agricultural development is limited to the maintainace of a certain level of self-sufficiency in basic products. Finland's accession to the EU has further accelerated the process of restructuring and downsizing of this sector.
One of Finland's key economic sectors is production, in particular, wool, metals, engineering, telecommunications, the electronics industry and especially the forestry industry. In effect, the wood industry and paper manufacturing are very developed and represent the backbone of Finnish exports. It is the second sector of activity for the rural population. However, the production sector has slowed down significantly, especially because of the decrease in demand in the paper sector (newspapers and magazines), caused by the world economic crisis.
The telecommunications sector also represents an important section of the country's industrial activity due to Nokia, the world leading manufacturer of mobile telephones, which accounts for a significant part of the country's exports.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Employment by sector (in % of total employment)	4.8	25.6	69.4
Value added (in % of GDP)	3.2	32.3	64.6
Value added (annual % change)	16.8	5.7	3.3

- last available data.

Monetary indicators	2004	2005	2006	2007	2008
Euro (EUR) - Average annual exchange rate for 1 USD	0.81	0.80	0.80	0.73	0.68

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 74.5/100
Position:: mostly free
World Rank:: 17 out of 179
Regional Rank:: 9 out of 44

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

Finland is a highly industrialized country, whose economy relies heavily on exports (40% of the GNP). In 2007, the EU countries accounted for more than the majority of Finnish exports and imports. In 2008, Finland was affected by the financial crisis, which upset its trade balance, a fact which did not hinder the country showing a trade surplus in 2008. However, the balance went into deficit in 2009 and should go back into surplus in 2010.

The policies implemented between 1996 and 2000 (privatization, decentralization, reform of the labor market , etc.) led the public sector to making significant improvements and led the country to be ranked amongst the best growth performers in the European Union. These good results make the Finnish market more attractive to exporters. In addition, the increase in the Finnish consumers' purchasing power has boosted Finnish imports. However, considering the current economic situation, consumers might go back to cheaper foreign products, a fact which would contribute to the deterioration of the country's trade balance.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	39,790	48,368	55,887	66,046	78,190
Exports of goods (millions USD)	52,740	61,139	65,451	77,552	90,126
Imports of services (millions USD)	12,149	14,563	17,732	18,641	21,763
Exports of services (millions USD)	11,470	15,168	17,010	17,520	20,212
Imports of goods and services (annual % change)	3.0	7.2	11.8	7.8	4.1
Exports of goods and services (annual % change)	-1.7	8.6	7.0	11.8	4.8
Imports of goods and services (in % of GDP)	31.5	33.0	37.4	40.2	40.1
Exports of goods and services (in % of GDP)	38.6	39.9	41.8	45.2	44.8
Trade Balance (millions USD)	12,950	12,770	9,564	11,505	11,936
Trade Balance (including service) (millions USD)	12,271	13,375	8,841	10,385	10,384
Foreign trade (in % of GDP)	70.1	73.0	79.2	85.4	85.0

Source: World Bank

Main partner countries

Main customers (% of exports)	2008
Russia	11.6%
Sweden	10.0%
Germany	10.0%
United States	6.3%
United Kingdom	5.5%
Netherlands	5.1%
France	3.5%
Italy	3.3%
Poland	3.2%
China	3.1%
Norway	3.0%
Spain	2.9%
Belgium	2.5%
Estonia	2.2%
Denmark	2.1%
Japan	1.8%
Turkey	1.0%
United Arab Emirates	1.0%
Ukraine	1.0%
Saudi Arabia	0.9%
See more countries	56.5%

Main suppliers (% of imports)	2008
Russia	16.3%
Germany	13.9%
Sweden	9.8%
China	7.0%
Netherlands	4.2%
United Kingdom	4.1%
France	3.4%
Italy	3.0%
United States	3.0%
Norway	2.7%
South Korea	2.5%
Denmark	2.3%
Belgium	2.3%
Estonia	2.2%
Japan	2.0%
Poland	1.6%
Spain	1.3%
Canada	1.1%
Slovakia	1.0%
Australia	1.0%
See more countries	48.8%

Source: Comtrade

Main products

Main exports (% of exports)	2008
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	20.6%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	14.7%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	11.9%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	6.9%
Iron and steelIron and steel	6.5%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	5.6%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	3.5%
Plastics and articles thereofPlastics and articles thereof	2.7%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	2.5%
Ships, boats and floating structuresShips, boats and floating structures	2.3%
Articles of iron or steelArticles of iron or steel	1.9%
Pulp of wood or of other fibrous cellulosic...Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard	1.6%
Copper and articles thereofCopper and articles thereof	1.6%
Pharmaceutical productsPharmaceutical products	1.2%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	1.1%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	1.0%
Organic chemicalsOrganic chemicals	1.0%
Nickel and articles thereofNickel and articles thereof	0.9%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.8%
Rubber and articles thereofRubber and articles thereof	0.7%
Miscellaneous chemical productsMiscellaneous chemical products	0.7%
Zinc and articles thereofZinc and articles thereof	0.6%
Other base metals; cermets; articles thereofOther base metals; cermets; articles thereof	0.6%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.6%
Glass and glasswareGlass and glassware	0.5%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.5%
Aluminium and articles thereofAluminium and articles thereof	0.5%
FertilizersFertilizers	0.4%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.4%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.4%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.4%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	0.2%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	0.2%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.2%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.2%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.2%
Meat and edible meat offalMeat and edible meat offal	0.2%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	0.2%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	0.2%
CerealsCereals	0.2%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.2%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.2%
Wadding, felt and nonwovens; special yarns; twine,...Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof	0.1%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	0.1%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.1%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.1%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.1%
Sugars and sugar confectionerySugars and sugar confectionery	0.1%
Man-made staple fibresMan-made staple fibres	0.1%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	0.1%
Products of the milling industry; malt; starches;...Products of the milling industry; malt; starches; inulin; wheat gluten	0.1%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.1%
See more products	39.5%

Main imports (% of imports)	2008
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	17.6%
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	13.6%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	11.8%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	8.9%
Iron and steelIron and steel	4.4%
Ores, slag and ashOres, slag and ash	3.2%
Plastics and articles thereofPlastics and articles thereof	2.9%
Pharmaceutical productsPharmaceutical products	2.7%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	2.4%
Articles of iron or steelArticles of iron or steel	2.3%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	1.9%
Organic chemicalsOrganic chemicals	1.7%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	1.3%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	1.1%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	1.0%
Rubber and articles thereofRubber and articles thereof	1.0%
Miscellaneous chemical productsMiscellaneous chemical products	1.0%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	1.0%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	0.9%
Nickel and articles thereofNickel and articles thereof	0.8%
Aluminium and articles thereofAluminium and articles thereof	0.7%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.7%
Copper and articles thereofCopper and articles thereof	0.6%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	0.6%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	0.5%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	0.5%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.5%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.5%
Other base metals; cermets; articles thereofOther base metals; cermets; articles thereof	0.5%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.4%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.4%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.4%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.4%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.4%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.4%
Pulp of wood or of other fibrous cellulosic...Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard	0.4%
Glass and glasswareGlass and glassware	0.4%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.4%
Residues and waste from the food industries;...Residues and waste from the food industries; prepared animal fodder	0.3%
Preparations of vegetables, fruit, nuts or other...Preparations of vegetables, fruit, nuts or other parts of plants	0.3%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.3%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.3%
Coffee, tea, maté and spicesCoffee, tea, maté and spices	0.3%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.3%
Edible vegetables and certain roots and tubersEdible vegetables and certain roots and tubers	0.3%
FertilizersFertilizers	0.3%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	0.3%
Articles of leather; saddlery and harness; travel...Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)	0.3%
Ceramic productsCeramic products	0.3%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.2%
Other made-up textile articles; sets; worn...Other made-up textile articles; sets; worn clothing and worn textile articles; rags	0.2%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.2%
Meat and edible meat offalMeat and edible meat offal	0.2%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.2%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.2%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	0.2%
Cocoa and cocoa preparationsCocoa and cocoa preparations	0.2%
Sugars and sugar confectionerySugars and sugar confectionery	0.2%
Oil seeds and oleaginous fruits; miscellaneous...Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder	0.2%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.2%
Ships, boats and floating structuresShips, boats and floating structures	0.2%
Live trees and other plants; bulbs, roots and the...Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage	0.1%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	0.1%
Railway or tramway locomotives, rolling-stock and...Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds	0.1%
Wadding, felt and nonwovens; special yarns; twine,...Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof	0.1%
Arms and ammunition; parts and accessories thereofArms and ammunition; parts and accessories thereof	0.1%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.1%
See more products	43.7%

Source: Comtrade

See more products: More imports (Intracen Data)
More exports (Intracen Data)

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

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) – a moderate liberal party of Swedish speaking minority.
Current political leaders: President: Tarja Halonen (since March 2000, re-elected in January 2006) –Social Democratic Party (SDP)
Prime Minister Matti Vanhanen (since June 2003) – Center Party, heading a coalition of Central Party and National Coalition Party
Next election dates: Presidential: January 2012
Parliamentary: March 2011

Indicator of freedom of the press

World Rank:: 5/173
Evolution:: 1 place up compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

Indicator of political freedom

Ranking:: Free
Political freedom:: 1/7
Civil liberties:: 1/7

Map of freedom 2007
Source: Freedom House

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