Overview: Finland has a highly industrialized, largely free market economy, with per capita output two-thirds of the US figure. Its key economic sector is manufacturing - principally the wood, metals, and engineering industries. Trade is important, with the export of goods representing about 30% of GDP. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. The economy, which experienced an average of 4.9% annual growth between 1987 and 1989, sank into deep recession in 1991 as growth contracted by 6.5%. The recession - which continued in 1992 with growth contracting by 4.1% - has been caused by economic overheating, depressed foreign markets, and the dismantling of the barter system between Finland and the former Soviet Union under which Soviet oil and gas had been exchanged for Finnish manufactured goods. The Finnish Government has proposed efforts to increase industrial competitiveness and efficiency by an increase in exports to Western markets, cuts in public expenditures, partial privatization of state enterprises, and changes in monetary policy. In June 1991 Helsinki had tied the markka to the European Union's (EU) European Currency Unit (ECU) to promote stability. Ongoing speculation resulting from a lack of confidence in the government's policies forced Helsinki to devalue the markka by about 12% in November 1991 and to indefinitely break the link in September 1992. The devaluations have boosted the competitiveness of Finnish exports to the extent the recession bottomed out in 1993 with renewed economic growth expected in 1994. Unemployment probably will remain a serious problem during the next few years, with the majority of Finnish firms facing a weak domestic market and the troubled German and Swedish export markets. Declining revenues, increased transfer payments, and extensive funding to bail out the banking system pushed the central government's budget deficit to nearly 13% in 1993. Helsinki continues to harmonize its economic policies with those of the EU during Finland's current EU membership bid. In early 1995, Finland is expected to join the European Union (formerly the European Community), thus broadening European economic unity.

National product: GDP - purchasing power equivalent - $81.1 billion (1993)

National product real growth rate: -2.6% (1993)

National product per capita: $16,100 (1993)

Inflation rate (consumer prices): 2.1% (1992)

Unemployment rate: 22% (1993)

Budget:
revenues: $26.8 billion
expenditures: $40.6 billion, including capital expenditures of $NA (1992)

Exports: $23.4 billion (f.o.b., 1993)
commodities: timber, paper and pulp, ships, machinery, clothing and footwear
partners: EC 53.2% (Germany 15.6%, UK 10.7%), EFTA 19.5% (Sweden 12.8%), US 5.9%, Japan 1.3%, Russia 2.8% (1992)

Imports: $18 billion (c.i.f., 1993 est.)
commodities: foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, fodder grains
partners: EC 47.2% (Germany 16.9%, UK 8.7%), EFTA 19.0% (Sweden 11.7%), US 6.1%, Japan 5.5%, Russia 7.1% (1992)

External debt: $30 billion (December 1993)

Industrial production: growth rate 7.6% (1992 est.)

Electricity:
capacity: 13,500,000 kW
production: 55.3 billion kWh
consumption per capita: 11,050 kWh (1992)

Industries: metal products, shipbuilding, forestry and wood processing (pulp, paper), copper refining, foodstuffs, chemicals, textiles, clothing

Agriculture: accounts for 5% of GDP (including forestry); livestock production, especially dairy cattle, predominates; forestry is an important export earner and a secondary occupation for the rural population; main crops - cereals, sugar beets, potatoes; 85% self-sufficient, but short of foodgrains and fodder grains; annual fish catch about 160,000 metric tons

Economic aid:
donor: ODA and OOF commitments (1970-89), $2.7 billion

Currency: 1 markka (FMk) or Finmark = 100 pennia
Exchange rates: markkaa (FMk) per US$1 - 5.6920 (January 1994), 5.7123 (1993), 4.4794 (1992), 4.0440 (1991), 3.8235 (1990), 4.2912 (1989)

Fiscal year: calendar year

NOTE: The information regarding Finland on this page is re-published from the 1995 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Finland Economy 1995 information contained here. All suggestions for corrections of any errors about Finland Economy 1995 should be addressed to the CIA.