Finland Inflation Rate
Finland is highly integrated in the global economy, and international trade is a third of GDP. The largest trade flows are with Germany, Russia, Sweden, the United Kingdom, the United States, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone; Denmark and Sweden have retained their traditional currencies, whereas Iceland and Norway are not members of the EU at all. The largest industries are electronics (21.6 percent), machinery, vehicles and other engineered metal products (21.1 percent), forest industry (13.1 percent), and chemicals (10.9 percent). Forestry, paper factories, and the agricultural sector are politically sensitive to rural residents.
In 2003, slow international economic growth has had a pronounced impact on Finland, as on other countries, by way of the export sector. In the first quarter of 2003, total output was markedly smaller than in the previous quarter and exceeded the level of 2 years ago only by a narrow margin.
Public spending remained under firm control, but low interest rates and tax cuts fueled domestic inflation. At roughly ten-year intervals, Finland experienced export-led booms followed by major devaluations and severe recessions.
Like other Nordic countries, Finland has liberalized its system of economic regulation since late 1980s. Some state enterprises were privatized and some tax rates were altered.In 1991, the Finnish economy fell into a severe recession. This was caused by a combination of economic overheating , depressed markets with key trading partners as well as local markets, slow growth with other trading partners, and the disappearance of the Soviet bilateral trade. The growth in the 1980s was based on debt, and when the defaults began rolling in, GDP declined by 13% and unemployment increased from a virtual full employment to one fifth of the workforce.
There was a quite common, but pragmatic-minded, credit and investment cooperation by state and corporations, though it was considered with suspicion. On the other hand, communists (Finnish People’s Democratic League) have received the most votes (23.2%) in 1958 parliamentary elections. Savings rate hovered among the world’s highest, at around 8% until the 1980s. In the beginning of the 1970s, Finland’s GDP per capita reached the level of Japan and the UK. Finland’s economic development shared many aspects with export-led Asian countries.
Forest products has been the major export industry in the past, but diversification and growth of the economy has reduced its share. In the 1970s, the pulp and paper industry accounted for half of Finnish exports. Although this share has shrank, pulp and paper is still a major industry with 52 sites across the country. Furthermore, several of large international corporations in this business are based in Finland.
Finland: Recovery In Economic Activity Loses Steam In December
Fluctuations in world demand for Finnish exports were largely responsible for the cycles, but economic policies magnified them. Output recovered following each devaluation, only to decline as domestic inflation rocketed higher, further eroding competitiveness in external markets. in export of technology as well as promotion of startups in the information and communications technology, gaming, cleantech, and biotechnology sectors. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the cold climate, agricultural development is limited to maintaining self-sufficiency in basic products.
The huge war reparations to the Soviet Union were the priority problem of the decision makers. The favorable development of the domestic machinery and shipbuilding industries, which was based on domestic demand during the interwar period and arms deliveries to the army during the War made war-reparations deliveries possible. Gradually the productive capacity was modernized and the whole industry was reformed. Evacuees and soldiers were given land on which to settle, and this contributed to the decrease in farm size. A large number of new, small farms were established, which could only support families if they had extra income from forest work. On the eve of World War II, almost half of the labor force and one-third of the production were still in the primary industries. Small-scale agriculture used horses and horse-drawn machines, lumberjacks went into the forest with axes and saws, and logs were transported from the forest by horses or by floating.
The revolution of 1917 in Russia and Finland’s independence cut off Russian trade, which was devastating for Finland’s economy. The food situation was particularly difficult as 60 percent of grain required had been imported. See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
China’s Industrial Production, Retail Sales Rebound
Similar policies spurred production of consumer goods, maintaining industrial employment. As in other Nordic countries, the central bank experimented with Keynesian demand-management policies. During the immediate postwar years, Finland depended on aid from the United States to avoid starvation, but by 1922 industrial production had reached the prewar level.
In other words, the purchasing power of €100 in 1956 equals €1,885.77 in 2021. Core Inflation Rate in Finland averaged 1.76 percent from 1990 until 2021, reaching an all time high of 5.70 percent in January of 1990 and a record low of 0 percent in June of 2018. This page provides – Finland Core Inflation Rate- actual values, historical data, forecast, chart, statistics, economic calendar and news. Finland Core Inflation Rate – values, historical data and charts – was last updated on March of 2021. Inflation Rate in Finland averaged 4.60 percent from 1961 until 2021, reaching an all time high of 19.31 percent in January of 1975 and a record low of -1.54 percent in October of 2009. This page provides the latest reported value for – Finland Inflation Rate – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.
Slower Growth From The 1970s
Prices rose softer for food and non-alcoholic beverages (0.2 percent vs 1.5 percent in November), those of housing & utilities were unchanged (vs 0.1 percent). Meantime, prices of alcoholic beverages & tobacco rose more (3.3 percent vs 3.2 percent) while inflation was steady for education (vs 1.0 percent). At the same time, recreation & culture prices fell 0.3 percent in December, after a flat reading in the prior month.
As a result of the resettlement and land-clearing programs, the area under cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s. Finland thus came to farm more land than ever before, an unusual development in a country that was simultaneously experiencing rapid industrial growth.
National Data And Trends
The implementation of monetary policy shifted from offering negative interest rates in a protected capital market to using interest rates to dampen inflation and to influence the exchange rate. Monetary policy came to depend even more on market operations by the mid-1980s, as deregulation of financial markets eliminated the earlier system of capital rationing. The tighter monetary stance tended to reduce the volume of investment, but economists expected that the quality of investments would improve. After 1977, the BOF attempted to peg the external value of the Finnish mark to a trade-weighted “basket” of foreign currencies. The new exchange-rate policy was meant to curtail both domestic and imported inflation. Indeed, in 1979 and 1980, the currency was allowed to appreciate for the first time in the postwar period in response to greater export demand. Policy makers hoped that the stable exchange rate would eliminate distortions caused by an undervalued or overvalued currency and would allow market conditions to determine investment decisions.
Wood burning fell to one-fifth the level of the immediate postwar years, freeing up wood supplies for the wood-processing industries, which consumed between 40 million and 45 million cubic meters per year. Indeed, industry demand was so great that Finland needed to import 5 million to 6 million cubic meters of wood each year. The Ministry of Agriculture and Forestry has carried out forest inventories and drawn up silvicultural plans.
The existence of many farms that were too small to allow efficient use of tractors also limited mechanisation. Another weak point was the existence of many fields with open drainage ditches needing regular maintenance; in the mid-1980s, experts estimated that half of the cropland needed improved drainage works. At that time, about 1 million hectares had underground drainage, and agricultural authorities planned to help install such works on another million hectares. Despite these shortcomings, Finland’s agriculture was efficient and productive—at least when compared with farming in other European countries.
Lastly, harmonized inflation came in at 1.1% in January, markedly up from December’s 0.2%. For one, the public sector has expanded credit enormously to compensate for the expected tax shortfall and increased spending, thus holding large amounts of liquidity at the moment. The corporate sector, too, has upped its liquidity position by increasing debt, not least thanks to generous state-guaranteed loans schemes. In addition, corporate-bond issuance has also risen to record levels, which in the context of central-bank purchases led to higher money supply. For Exports, FDI and GDP measures, a higher rank (closer to 100%) indicates a stronger economy.
- Tariffs applied by Finland as provided by ITC’s Market Access Map, an online database of customs tariffs and market requirements.
- At the same time, rising domestic and foreign demand for dairy products and the availability of low-cost imported cattle feed made dairy and meat production much more profitable.
- For example, it assigns unemployment rates in increasing order, whereas we rank them in decreasing order.
- The main commercial tree species—pine, spruce, and birch—supplied raw material to the sawmill, pulp, and paper industries.
- Some observers suggested that the trend toward internationalization might increase the influence of foreign firms and executives in Finnish enterprises, but this effect would make itself felt slowly.
- For this reason, companies now tend to focus on high added-value processing of metals.
According to a 2003 report, residents worked on average around 10 years for the same employer and around 5 different jobs over a lifetime. Female employment rate was high and gender segregation on career choices was higher than in the US. Between 2000 and 2003, early stage venture capital investments relative to GDP were 8.5 percent against 4 percent in the EU and 11.5 in the US. In 2000 FDI from Finland to overseas was 20 billion euro and from overseas to Finland 7 billion euro.
Finland Inflation Rises In January
Some iron works were founded in the southwestern part of the country in order to process Swedish iron ore as early as in the seventeenth century. Significant tar burning, sawmilling and fur trading brought cash with which to buy a few imported items such as salt, and some luxuries – coffee, sugar, wines and fine cloths.
More than four-fifths of exports were based on wood, and one-third of industrial production was in sawmilling, other wood products, pulp and paper. Other growing industries included mining, basic metal industries and machine production, but they operated on the domestic market, protected by the customs barriers that were typical of Europe at that time. Finland’s export-dependent economy continuously adapted to the world market; in doing so, it changed Finnish society as well. Transportation and construction, for example, each accounted for between 7 and 8 percent in both 1950 and 1985, and manufacturing’s share rose only from 22 to 24 percent. However, both the commercial and the service sectors more than doubled their share of the work force, accounting, respectively, for 21 and 28 percent in 1985.
India Industrial Production Declines Unexpectedly
This makes Russia one of Finland’s three biggest trading partners, Sweden and Germany being the other two with a ten percent share each. Electronics started its spectacular rise in the 1980s and it is now the largest single manufacturing industry with a 25 percent share of all manufacturing. Nokia is the world’s largest producer of mobile phones and a major transmission-station constructor. Connected to this development was the increase in the research-and- development outlay to three percent of GDP, one of the highest in the world.