Economic Analysis


Population 5.5 million
GDP per capita 48,810 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2018 2019 2020 (e) 2021 (f)
GDP growth (%) 1.3 1.3 -2.7 2.7
Inflation (yearly average, %) 1.1 1.0 0.3 1.8
Budget balance (% GDP) -0.9 -0.9 -5.4 -4.5
Current account balance (% GDP) -1.8 -0.3 0.7 -0.8
Public debt (% GDP) 59.7 59.5 69.0 70.4

(e): Estimate (f): Forecast


  • Generally prudent economic policy
  • Skilled workforce and favourable business climate
  • High standard of living


  • Highly vulnerable to international economic conditions (goods & services exports = 37% of GDP)
  • Dependence of the Finnish banking on the Swedish and Danish financial sectors, despite the return of a major institution in 2017
  • Ageing population (21% of the population are pensioners in 2020)

Risk assessment

Robust recovery after a mild recession

A robust economic recovery is expected in 2021, after the Finish economy went into a recession in 2020 because of the COVID-19 pandemic. Overall, the recession was milder than in most other European countries, as the whole country never went into a complete lockdown. Due to the sparse population in some regions, lockdown rules differed locally. Until this summer, Finland had four COVID-19 waves (spring 2020, October to December 2020, February to March 2021), with the latest one starting in July 2021. Thanks to punctual restrictions and a strong vaccination campaign (67% of the population was at least once vaccinated in mid-August), the negative economic impact of the pandemic in the first half of 2021 was limited. The economy contracted only marginally in Q1 2021 and showed a stronger performance in the second quarter. The outlook for the rest of the year is positive. The economy is benefiting from the fact that many Finns will again stay at home for their holidays this summer and support private consumption (Finland has structurally a negative tourism balance). Furthermore, the Finnish industry focuses on investment goods with a longer production time. Therefore, the production should gradually increase due to the stronger demand for such goods from the domestic market, as well as from the main export markets in Germany, Sweden, the U.S. and China, where the industrial production soared in the first half of the year. Services exports, mainly ICT and business services, should remain strong. Consumers in Finland should further benefit from the high welfare state expenditures (24% of GDP). The unemployment rate, which increased significantly in spring 2020 despite the extensive use of furlough, should return to more moderate levels in 2021, but will probably remain above the pre COVID-19 level until the end of the year. However, consumer prices went up sharply, by over 2% in late spring 2021, a 9-year-high. Prices for building products, gasoline and food went up abruptly. The price pressure should remain high until the end of the year and level out some of the increase in the purchasing power due to the recovery of the labour market. Some of the fiscal measures adopted in 2020, such as public investment projects amounting to EUR 1 billion, should foster the economic recovery in 2021. The business development aid, introduced in 2020, was extended until the end of the year 2021 with a company-specific maximum state aid of EUR1.8 million. Besides that, Finland is expected to receive roughly EUR 2.1 billion out of the EU Recovery Fund between 2021 and 2026. According to the plans, 51% should go into investments into green transition and 24% into digital transformation projects. The rest is reserved for the direct fight against the pandemic. Additional support is coming from the ECB, which extended its asset purchases by EUR 500 billion up to EUR 1850 billio, so that it has enough liquidity to buy assets in an unchanged manner until the end of March 2022.


Public debt surges

Finland’s current account balance, which went into a surplus in 2020, due to surprisingly strong goods exports at the end of the year, should return to a slight deficit in 2021, as goods exports will come back to a lower and more sustainable level during the year. Despite still robust services exports, the services trade balance should remain structurally negative and, combined with high income-transfers abroad (a negative secondary income balance), be the main reason for the persisting current account deficit. The general government budget deficit, which surged in 2020, should decrease somewhat but remain above the Maastricht target of 3% in 2021. This should lead to a record general government debt of around 70% of GDP.


Fiscal policy is the bone of contention in the Finnish government

Social Democrat (SDP) PM Sanna Marin is leading a centre-left coalition with four other parties – the Centre Party (KESK), the Green League (VIHR, environmentalist), the Left Alliance (VAS) and the Swedish People’s Party (SFP, centre). In 2020, the government gained a lot of support from the population in how it dealt with the COVID-19 crisis. In 2021, the focus of the public discussion however turned to fiscal policy. In late April 2021, debates around the next public budget plan almost lead into a break-up of the government, as the liberal KESK’s preference for a future austerity path collided heavily with the left VAS’s and VIHR’s preferred fiscal stimulus. After longer negotiations, they found an agreement. However, since then, the polls for the main opposition party, the liberal-conservative National Coalition, have gone up and they have taken the lead in summer 2021. Nevertheless, the government coalition and PM Marin are expected to last until the next parliamentary elections in 2023.


Last updated: August 2021


Bills of exchange are not commonly used in Finland because they signal the supplier’s distrust of the buyer. A bill of exchange primarily substantiates a claim and constitutes a valid acknowledgment of debt.


Cheques, also little used in domestic and international transactions, only constitute acknowledgement of debt. However, cheques that are uncovered at the time of issue can result in the issuers being liable to criminal penalties. Moreover, as cheque collection takes a particularly long time in Finland (20 days for domestic cheques or cheques drawn in European and Mediterranean coastal countries; 70 days for cheques drawn outside Europe), this payment method is not recommended.


Conversely, SWIFT bank transfers are increasingly used to settle domestic and international commercial transactions. When using this instrument, sellers are advised to provide full and accurate bank details to facilitate timely payment, while it should not be forgotten that the transfer payment order will ultimately depend on the buyer’s good faith. Banks in Finland have adopted the SEPA standards for euro-denominated payments.

Debt collection

Amicable phase

The goal of the amicable phase is to reach a voluntary settlement between the creditor and debtor without beginning legal proceedings. Finnish legislation obliges creditors to begin the amicable phase amicable phase via letters, followed up as necessary with a final demand for payment by recorded delivery or ordinary mail. This demand for payment asks the debtor to pay the outstanding principal increased by past-due interest as stipulated in the contract.


In the absence of an interest rate clause in the agreement, interest automatically accrues from the due date of the unpaid invoice at a rate equal to the central bank of Finland’s (Suomen Pankki) six-monthly rate, calculated by reference to the European Central Bank’s refinancing rate, plus seven percentage points.

The Interest Act (Korkolaki) already required debtors to pay up within contractually agreed timeframes or become liable to interest penalties.


Since 2004, the ordinary statute of limitations for Finnish contract law is three years.


Legal proceedings
Fast-track proceedings

For clear and uncontested claims, creditors may use the fast-track procedure, resulting in an injunction to pay (suppea haastehakemus). This is a simple written procedure based on submission of whatever documents substantiate the claim (invoices, bills of exchange, acknowledgement of debt, etc.). The court sets a time limit of approximately two weeks to permit the defendant to either respond to or oppose the petition. In addition, this fast track procedure can also be initiated electronically for cases of undisputed claims. The presence of a lawyer, although commonplace, is not required for this type of action.


Ordinary proceedings

Ordinary legal action usually commences when amicable collection has failed. A written application for summons must be addressed to the registry of the District Court, which then serves the debtor with a Writ of Summons. The debtor is given approximately two weeks to file a defence.


During the preliminary hearing, the court bases its deliberations on the parties’ written submissions and supporting documentation. The court then convokes the litigants to hear their arguments and decide on the relevance of the evidence. During this preliminary phase, and with the judge’s assistance, it is possible for the litigants to resolve their dispute via mediation and subsequently protect their business relationship.


Where the dispute remains unresolved after this preliminary hearing, plenary proceedings are held before the court of first instance (Käräjäoikeus) comprising between one and three presiding judges, depending on the case’s complexity.


During this hearing, the judge examines the submitted evidence and hears the parties’ witnesses. The litigants then state their final claims, before the judge delivers the ruling, generally within 14 days.


The losing party is liable for all or part of the legal costs (depending on the judgement) incurred by the winning party. The average time required for obtaining a writ of execution is about 12 months. Undisputed claims in Finland can normally last from three to six months. Disputed claims and the subsequent legal proceedings can take up to a year.


Commercial cases are generally heard by civil courts, although a Market Court (Markkinaoikeus) located in Helsinki has been in operation as a single entity since 2002, following a merger of the Competition Council and the former Market Court.

Enforcement of a Court decision

A judgment is enforceable for fifteen years as soon as it becomes final. If the debtor fails to comply with the judgment, the creditor may have it enforced by a bailiff, who will try to obtain an instalment agreement with the debtor, or enforce it through a seizure of assets.


For foreign awards, since Finland is part of the EU, it has adopted enforcement mechanisms applicable to court decisions issued by other EU members, such as the EU Payment Order and the European Enforcement Order. For judgments issued by non-EU members, the issuing country must be part of a bilateral or multilateral agreement with Finland.

Insolvency proceedings

Out-of-Court proceedings

Finnish law provides no specific rules for out-of-court settlements. Negotiations between creditors and debtors are made informally. If an agreement is reached, it must still be validated by the court.


Restructuring proceedings

The goal of restructuring is to allow an insolvent company to remain operational through administration, with the view that if the company is able to continue its business, it will be able to repay a larger part of its debts than would have been possible in the case of bankruptcy of the company. The commencement of these proceedings triggers an automatic moratorium, providing the company with protection from its creditors.


The board of directors maintains its power of decision but the receiver is entitled to control certain aspects of the company’s operations, including the creation of new debts and overseeing transfers of ownership.



When debtors are unable to pay their debts when due and this inability is not temporary, they are placed into liquidation. Upon acceptance of a liquidation petition by the court, the debtor is declared bankrupt. A receiver is appointed, and a time limit is established for any creditors to present their claims. The receiver then establishes a proposed distribution scheme, whilst creditors supervise the selling of the estate and the distribution of the sales’ proceeds.

Insolvency trend Finland
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