Finland Economy

Finland is a developed industrialized country. Actively using the advantages of international division of labor,  this country recently has achieved high rates of overall economic development. In terms of GDP per capita (over 25 thousand dollars), it ranks 14 among the OECD countries.

Although its importance in the global economy is small: about 0.5% of world GDP, 0,4% of industrial output and 0.8% of exports, it holds significant positions in production and export of certain industrial products, especially timber, paper sector and electronics.Over  36 Finnish companies are global market leaders in their sectors for 63 types of goods and services.

In the postwar period the economy of Finland underwent an intensive restructuring after which it had an exceptionally rapid economic growth and economic face of the country completely changed.

The process of industrialization was based on the development of such industries as metallurgy, machinery, chemicals and energy. By the end of 90 years compared to the early 50-ies in the structure of industry value added significant changes: the share of machinery increased from 25% to 36% and chemistry increased from 7% to 10%, increased the proportion of metallurgy with 3 % to 5%, the share of energy has increased from 4% to 9%.

Due to the limited natural resources (significant only timber stocks, there are also deposits of iron ore, zinc, lead, copper) and small internal market, Finland’s economy is focused on the production of specialized products for the global market.

This reduces the sensitivity of the Finnish economy to  fluctuations in world markets. In the early 90-ies  Finland’s economy experienced a severe economic crisis caused by the general economic slowdown in developed countries and a sharp reduction in trade with Russia. Its result was the rise in unemployment – from 5.6% to about 20%.

From 1994 to 2000, economic growth in Finland was among the highest among OECD countries (more than 4% a year), due to low initial post-crisis level, as well as the liberalization of trade and financial markets, the rapid development of telecommunications business, a high level technology and management skills. As a result, by 2000 the devastating effects of crisis in the early 1990′s were largely overcome, although unemployment and national debt have remained relatively high: respectively 9,8% of the working population and 49,1% of GDP.

In 2001, under the influence of a new global cyclical downturn, Finland was among the first countries in the European Union entered a period of slowing economic development. In 2002, the rate of the economy have improved somewhat, GDP grew by 1.6%, while exports – by 5.6%. Industrial production increased by 1,5% in the first place – through the production of electronic products. Other traditionally strong sectors of the Finnish economy – timber and paper, machine-building – has not yet reached the level of production in 2000.

The unemployment rate fell in 2001 to 9,1%, and remained in 2002 at the same level. Today Finland economy continues to develop positively.