Country Focus: Finland

Finland is situated in Northern Europe, bordering the Baltic Sea, the Gulf of Bothnia, and the Gulf of Finland, and land borders with Sweden, Norway and Russia. The country has a highly industrialised, largely free-market economy, with a per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing, principally the wood, metals, engineering, telecommunications, and electronics industries. In fact it has often been described as a ‘communications superpower’ due to the prevalence of Nokia in the mobile phone market and the penetration of internet usage in Finnish homes. The economy is testament to this success with forecasting institutions predicting 4% economic growth in Finland over 2006. If the forecast proves accurate, the country’s gross domestic product will grow at double the rate of the Eurozone.

The Finnish financial system is stable and free of significant threats in the short term and according to stress tests by the Bank of Finland, Suomen Pankki, it could also withstand a clear weakening in economic conditions. “The 3% annual growth that the Finnish economy has experienced over the last few years is a fine achievement, when compared with the modest figures for the euro area as a whole,” said Erkki Liikanen, Governor of the Bank of Finland, when presenting the bank’s economic forecast at the beginning of October.