Things look good for Finland.
But they haven’t always been
Nokia, the technology company, once contributed 4% to GDP and was a major exporter. The firm has since collapsed. Political instability isn’t uncommon. Trade with Russia, once a growing export partner, has nosedived due to western sanctions.
The result: a weakened economy.
But things are looking better.
Rolling the sleeves up
Workers responded well to a government campaign to work longer hours, give up bank holidays and lose other benefits.
This helped Finland lead the Eurozone pack in first quarter growth rate. And with the construction and service industries rebooting, the country is now back on track.
Banking on success
Nordea, the largest financial group in Northern Europe, is about to move its HQ to Finland. This will be a major boost to Finland’s banking sector, bringing up banking assets from 2 to 4 times GDP.
And the move has injected economic confidence into the country.
Ratings agency Fitch kept Finland’s AA plus rating. This will be welcomed by investors and comes on the back of reforms which have brought down the cost of labour.
Inflation is very low, at only 0.5%. And wages have only risen by around 6% since 2007.
With exports up and the country’s recovery making steady gains, there’s now calls from the nation’s unions to up wages. And there’s a concern that if these wage negotiations get messy, it could create instability and threaten future growth.