International
support

In more than 90 countries

Finland

Key data Change country

Economic and political overview

Economic Overview

Despite being vulnerable to the international conjuncture, Finland is often cited as a model example for its economic performance, competitiveness and innovative success. However, following a contraction in 2023 (-1.2%), Finland's real GDP growth remained weak in the first half of 2024. Goods exports dropped sharply in the first quarter due to prolonged port strikes, while private consumption stagnated amid rising unemployment and social benefit cuts. However, government consumption and net exports recently bolstered growth, with strong services exports and steady equipment investment signalling a potential recovery. Despite these positive trends, real GDP contracted an estimated 0.5% in 2024 due to a significant negative carryover effect (Bank of Finland). Real GDP is projected to grow by 1.5% in 2025 and 1.6% in 2026 according to the EU Commission (0.8% and 1.8%, respectively, as per the Bank of Finland), driven by domestic demand despite planned fiscal consolidation measures taking effect mainly in 2025.

In 2024, Finland's general government deficit rose to around 3.7% of GDP, up from 3.0% in 2023, driven by higher government spending and weaker public revenue growth. Increased government consumption, social benefits, and rising interest expenses were key factors. On the revenue side, cuts in social security contributions and lower tax receipts due to the economic slowdown further widened the gap. The deficit is projected to decline to 3% of GDP in 2025 as consolidation measures take effect and revenue benefits from economic recovery. These measures include expenditure cuts and the full impact of the 2024 VAT rate hike alongside higher taxes on income and social contributions. By 2026, the deficit is expected to shrink to 2.5% of GDP, with revenue recovery outpacing slower expenditure growth (data from the EU Commission). The general government debt-to-GDP ratio stood at 81.4% in 2023, with a small increase attributed to the primary deficit within central government finances, as well as deficits in local governments. The projection indicates a continued upward trend in the general government debt-to-GDP ratio, reaching 83.4% in 2025 and further escalating to 84.3% next year (IMF). Declining energy prices continued to slow down inflation and kept overall price increases at 1.2% in 2024 (from 4.3% one year earlier). Mostly due to the higher VAT rate, HICP inflation is forecast to increase to around 2% over the forecast horizon. High pension sector assets, totalling 94% of GDP at the end of March 2024, with over one-third held in public pension funds, remain a key rating strength. Alongside ongoing reform plans, they help alleviate the impact of a rapidly ageing population. Long-term projections suggest these assets will decline to about 75% of GDP by 2050 despite demographic challenges (Fitch Ratings).

Finland's GDP per capita – estimated at USD 57,181 (PPP) in 2025 by the IMF - is among the highest in the world and higher than the EU-27 average, allowing the country to offer a high living standard. The distribution of wealth is relatively balanced, although social inequalities have risen in recent years. Finland is the European country most impacted by an ageing population and the fall of its labour force, a phenomenon that weighs heavily on its public finances. Other challenges that the country will be facing are the decreasing productivity in traditional industries and the need for a reduction of high labour costs. Amid a declining vacancy rate, employment growth slowed to 0.8% in 2023, impacted by a sharp decline in the construction sector, while the unemployment rate rose to 7.2%. Employment contracted further in 2024, reflecting weakened economic activity, particularly in manufacturing, construction, and professional services, though labour shortages persisted in sectors like healthcare. With improving economic conditions, the unemployment rate is expected to decrease to 7.4% in 2025 and 7.3% in 2026, down from 8.3% in 2024.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 295.62306.08319.99333.64345.73
GDP (Constant Prices, Annual % Change) -1.2-0.22.01.81.7
GDP per Capita (USD) 53,13154,77457,18359,57961,737
General Government Balance (in % of GDP) -1.4-1.6-1.7-1.6-1.8
General Government Gross Debt (in % of GDP) 77.081.483.484.384.8
Inflation Rate (%) 4.31.21.92.02.0
Unemployment Rate (% of the Labour Force) 7.28.37.47.37.3
Current Account (billions USD) -3.24-3.54-3.76-3.62-3.43
Current Account (in % of GDP) -1.1-1.2-1.2-1.1-1.0

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

+

Main Sectors of Industry

Agriculture represents 2.3% of the Finnish GDP and employs around 4% of the population (World Bank, latest data available). Due to the unfavourable climate, agricultural development is limited to the maintenance of a certain level of self-sufficiency in basic products. Moreover, Finland's accession to the EU has further accelerated the process of restructuring and downsizing of the agriculture sector. The country has around 42,000 farms with 8% of arable land (12% of the country’s arable land is destined for organic cultivation), while almost three-quarters of the land area is covered with forests (FAO). According to preliminary statistics, the area of agricultural land in use in 2024 was just under 2.3 million hectares, with around 2 million hectares dedicated to arable land. Nearly half of Finland's arable land is used for cereals, while about a third is allocated to fodder grass. Cereal production dominates, followed by milk production and animal husbandry. Dairy farming is the sub-sector that generates the largest turnover. According to figures from the Natural Resources Institute, there were a total of 40,871 agricultural and horticultural enterprises in Finland in 2024 of which 84% were family-run, 9% were farming syndicates, while farms owned by heirs and limited liability farms represented about 6%.

Industry accounts for 23.9% of GDP, employing roughly 22% of the active population. Forestry is a traditionally well-developed sector for Finland as the country exports a wide variety of goods, ranging from simple wooden products to high-tech tags, labels, paper, cardboard and packaging. Other key industrial sectors are metal production, mechanical engineering and electronic goods. Finland also specialises in exporting information and communication technologies and is among the countries that invest substantially in R&D (around 2.99% of its GDP, World Bank). Overall, manufacturing contributes 15% of GDP. According to Statistics Finland, the value of the sold output of the industry was around EUR 95.5 billion in 2023 (-9%% y-o-y). The metal industry products accounted for EUR 40.4 billion, followed by chemicals (EUR 21.2 billion), and forestry (EUR 16.2 billion).

The services sector employs roughly three-quarters of the workforce and accounts for 61.4% of GDP. It is also responsible for generating the largest number of new businesses. The Finnish banking system is dominated by three major groups of deposit banks: OP Group, Nordea Bank Finland, and Danske Bank Plc Group. The information technology sector is growing at a fast pace, and so are the cleantech and biotechnology sectors. The latest data by Statistic Finland shows that in 2024 the volume of service industries grew by 2.8% compared to one year earlier.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.6 21.6 74.8
Value Added (in % of GDP) 2.3 23.9 61.4
Value Added (Annual % Change) -8.1 -2.0 0.3

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

+

Foreign Trade

Finland is a highly industrialised country whose economy relies heavily on foreign trade, which represents 85% of its GDP (World Bank – latest data available). In 2023, Finland mainly exported machinery and equipment (22,1%), chemicals (20%), metal and metal products (17%), and forestry products (15.6%); importing capital goods (except transport
equipment – 23.3%), fuels and lubricants (14.6%), transport equipment (13.4%), and food and beverage (7.2% - data Finnish Customs).

In 2023, the United States became Finland's largest export partner, with cruise ship exports to the country playing a significant role. The share of total exports reached 11.1%, and export value increased by 8.3%. Sweden ranked as the second-largest export partner, despite an 8.4% decline in export value, holding a share of 10.7%. Germany followed in third place, with export value rising by 3.1%, making up 10.5% of total exports. Meanwhile, trade with Russia continued to decline, with Russia's share of total exports falling to 0.9%. On the import side, Russia's share of Finland's total imports dropped to 1.7% in 2023, with the value of imports from the country plummeting by 78.5%. Norway became the fourth-largest import partner, with a share of 7.8%. Imports from Germany decreased by 8.8%, while those from Sweden fell by 25.2%. These two countries remained the largest sources of imports, followed by China, where import value declined by 19.9% (8.9% share), and the United States, with a 1.7% decline (5.4% share- data Finnish Customs).

Finland's trade balance had traditionally been positive in the past, but its performance deteriorated in the last decade, alternating slightly positive results with negative ones. In 2023, the total export of goods (at USD 82.3 billion, -4.3% y-o-y) was equal to the total value of imports (-15.4% y-o-y); whereas exports of services stood at USD 34.3 billion (-1.2%) against almost USD 43.6 billion of import (with an annual increase of 6.2% - data by WTO). According to the latest figures from Statistics Finland, in 2024, the value of Finnish exports dropped by 5.5%, totalling EUR 72.2 billion. Export volume fell by 3.5%, while export prices declined by 1.8% compared to 2023. Imports decreased by 3.3%, with a 2.8% drop in volume and a 0.6% decline in prices, standing at EUR 74.3 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 73,71668,26886,01397,32982,345
Exports of Goods (million USD) 73,46866,22081,99686,06982,355
Imports of Services (million USD) 36,55832,84936,51641,13443,683
Exports of Services (million USD) 34,40530,00233,85234,77134,349

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 80.672.279.894.185.3
Trade Balance (million USD) 2,8013,4192,583-23610,191
Trade Balance (Including Service) (million USD) 1,793828109-5,574871
Imports of Goods and Services (Annual % Change) 2.4-6.16.58.4-6.6
Exports of Goods and Services (Annual % Change) 6.8-8.56.04.20.2
Imports of Goods and Services (in % of GDP) 39.936.039.948.042.5
Exports of Goods and Services (in % of GDP) 40.636.239.946.142.8

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) -2.53.03.33.33.2
Volume of imports of goods and services (Annual % change) -3.13.03.33.33.3

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Finland is a member of the following international economic organisations: ICC, European Economic Area, WTO, European Union, G9, IMF, OECD, among others. For the full list of economic and other international organisations in which participates Finland click here. International organisation membership of Finland is also outlined here.
Free Trade Agreements
The up-to-date list of Free Trade Agreements signed by Finland can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
United States 11.0%
Sweden 10.5%
Germany 10.5%
Netherlands 8.0%
China 4.5%
See More Countries 55.6%
Main Suppliers
(% of Imports)		 2023
Germany 13.4%
Sweden 11.3%
China 9.3%
Norway 7.7%
United States 5.4%
See More Countries 52.9%

Source: Comtrade, Latest Available Data

 

+

Political Outline

Current Political Leaders
President: Alexander Stubb  (since 1 March 2024)
Prime Minister: Petteri Orpo (since 20 June 2023)
Next Election Dates
Presidential: 28 January 2030
Parliament: April 2027
Current Political Context
Presidential elections were held in Finland on 28 January 2024, with a second round held on 11 February. Incumbent president Sauli Niinistö was term-limited and ineligible to run for re-election, having served the maximum two terms. Alexander Stubb and Pekka Haavisto contested in a runoff on 11 February with Stubb winning 51.6% to Haavisto's 48.4%.
In the elections for the European Parliament in 2024, the populist radical-right Finns Party performed poorly, finishing sixth nationally, exiting with a loss of 6.2% from 2019 in terms of votes and one seat. On the other hand, the centre-right National Coalition Party was the winner with 24.8% of the vote and four seats, whereas the Left Alliance was the second contender with 17.3% and secured three seats.
Concerning its foreign and defence policy, in a historic decision, Finland officially joined the North Atlantic Treaty Organization (NATO) on 4 April 2023. This was in response to the ongoing Russia-Ukraine conflict and rising security concerns. By the end of 2024, Finland’s conservative-led government has unveiled a broad plan to lift defence spending from USD 6.8 billion in 2025 to USD 11.5 billion in 2032. Finally, in January 2025, Finland assumed the Chairpersonship of the Organization for Security and Co-operation in Europe (OSCE).
Main Political Parties
Finland has a multi-party system to ensure a single party does not have a chance to gain power alone. Parties work with each other to form coalition governments. The largest parties represented in the parliament following the latest elections include:

- National Coalition Party (KOK): centre-right, liberal conservatism, strongly pro-European. In the 2023 election, the party won 48 seats
- The Finns (PS): left-wing, nationalist. The party advocates for a more restrictive immigration policy and obtained 46 seats in the latest election
- Social Democratic Party (SDP): centre-left, social-democratic party that advocates for social justice, equality, and a strong safety net. It currently holds 43 seats in the parliament
- Centre Party (KESK): centre, wields political influence in smaller agrarian communities
- Green League (VIHR): centre, green politics, liberal
- Left Alliance (VAS): left-wing, social democratic
- Swedish People's Party (RKP): centre, represents the minority of Swedish speaking people in Finland
- Christian Democrats (KD): centre/centre-right
- Movement Now (Liike Nyt): liberal
- For Åland (ÅS): a political alliance of the main Åland parties.
Executive Power
The President of Finland is the Head of State, leader of foreign policy, and the commander-in-chief of the defence forces. He/she is directly elected by absolute majority for a six-year term, renewable once. The President appoints the Prime Minister. The main executive power lies in the Cabinet which is appointed and headed by the Prime Minister. Before the constitutional rewrite completed in 2000, the President enjoyed more power.
Legislative Power
Legislative power is vested in the Parliament of Finland (Eduskunta), with the Government holding limited rights to amend or extend legislation. It is composed of 200 deputies elected for four years by proportional representation. The President has the power of veto over parliamentary decisions although it can be overrun by the parliament.
 

+