Historically Finland is competitive in manufacturing. Particularly in the wood, metals, engineering, telecommunications and electronics industries. Finland excels in export of technology as well as promotion of start-ups in the information and communications technology, gaming, cleantech, and biotechnology sectors.
According to the economic survey of OECD (2019) Finland has had a long period of lacklustre economic performance. However, a strong rebound in exports is boosting the economy. Despite slow income growth, private consumption remains healthy and both business and residential investment are buoyant.
Finland has 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.
Competitiveness is being restored through ambitious and comprehensive structural reforms and an agreement between social partners on wage moderation. Employment is expanding, but the fall in the unemployment rate is slowed by the return of people who had given up job search to the labour market.
World Economic Forum’s the Europe 2020 Competitiveness Index places Finland as the most competitive country in Europe. According to a 2016 study by European Commission, Finland astounds as the most attractive EU country for Foreign Direct Investment. Finland earns praise for its highly skilled work force, ranking first in knowledge and innovation capacity.
According to data provided by Statistics Finland, the majority of the investment stock to Finland comes from Sweden (32%), Luxembourg (19%), the Netherlands (17%), Denmark (5%) and Germany (4%). Finland’s economies weak points are the small size of its market, a high vulnerability to the international situation, substantial labour costs and a high degree of dependence of the country’s banking sector on the Swedish and Danish financial sectors. Finland ranked 20th out of 190 countries in the World Bank’s 2020 Doing Business report.
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