Economic studies


Population 5,5 million
GDP 49,738 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 2.8 1.7 1.6 -4.9
Inflation (yearly average, %) 0.8 1.2 1.0 1.0
Budget balance (% GDP) -0.8 -0.7 -1.0 -1.2
Current account balance (% GDP) -0.8 -1.4 -0.7 -1.2
Public debt (% GDP) 60.8 59.3 59.7 59.5


(e): Estimate. (f): Forecast.


  • Prudent economic policy
  • Skilled workforce and favourable business climate
  • Advanced industries
  • High standard of living


  • Highly vulnerable to international economic conditions
  • Industrial crisis and loss of competitiveness
  • Dependence of the Finnish banking sector on the Swedish and Danish financial sectors, despite the return of a major institution in 2017
  • Ageing population

Risk assessment

Resilience of activity, driven by domestic demand

Growth is expected to remain resilient in 2020, thanks to the rebound in domestic demand. After slowing sharply in 2019, household consumption will pick up after substantial wage increases were agreed on during sector collective bargaining at the end of 2019, in line with the low unemployment rate (6.1% in August 2019). After stalling, business investment will also accelerate as supply constraints persist – both in equipment and labour – in an environment that remains supportive, with low interest rates and resilient domestic demand. The recovery in equipment investment will help to offset the pronounced slowdown on the way for residential construction, with the number of building permits falling by 21% in the first seven months of 2019 after already declining 11% in 2018. Moreover, as the regional context remains unfavourable – the country’s two main partners, Sweden and, above all, Germany (25% of exports in total), will continue to be sluggish – exports will slow down in 2020. In addition, while the economy made substantial competitiveness gains in 2017 as a result of the Competitiveness Pact (labour costs fell by 3.4% in real terms), significant wage increases in the following two years have somewhat eroded these advances. Imports will accelerate, driven by domestic demand. As a result, foreign trade will be a drag on growth in 2020.


Fiscal rigour despite a more expansionary budget

The new coalition’s first budget will be relatively expansionary. Additional public expenditure will be mainly allocated to “green” investments (transport and energy infrastructure, for a total of €750 million or 0.3% of GDP) and education (€256 million). On the tax side, the main measure in the 2020 budget is the income tax reduction (€200 million) achieved through bracket adjustments for the least well-off households. This measure will be paid for by an increase in excise duties on alcohol and tobacco (€100 million in total) and especially by an increase in fuel tax from August 2020 (€250 million). Revenues will remain high thanks to the resilient economy and low unemployment. Consequently, even if the government deficit deteriorates, it will remain well below 3%, and public debt, which has now fallen below the threshold set by the European Stability and Growth Pact (60% of GDP), will decline slightly. However, rapid population ageing will be a challenge for the social security system and public accounts in the medium term. Reforms to public social and health services with this goal in mind and designed to generate estimated annual savings of €3 billion have been repeatedly postponed and even led to the resignation of the Sipilä government in March 2019.

In terms of external accounts, Finland features a structural deficit in the balance of services and a surplus in trade in goods, although this has shrunk over the past decade. While wood and paper remain the main export sectors (21% of the total), the automotive industry (8% of the total) has been particularly vibrant in recent years, with exports almost doubling between 2016 and 2018. The tourism sector has also grown strongly, particularly around protected natural areas and the northern lights, and is now much less dependent on Russian visitors (12% of foreign tourists, down from 28% in 2013), thanks to the arrival of Asian tourists (18% of the total). Like the balance of services, income is structurally in deficit due to the repatriation of dividends by foreign investors. As a result, the current account balance will remain in deficit in 2020, but will continue to be comfortably financed through foreign investments (direct and portfolio).


Unstable centre-left coalition with five parties

Social Democrat (SDP) Antti Rinne, who was forced to form 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) –, following his narrow victory in the April 2019 parliamentary elections (with 17.7% of the vote), resigned less than eight months later, under pressure from KESK, in a context of social protest. Sanna Marin (SDP) has taken the lead in the coalition which - while the party of the outgoing prime minister, Juha Sipilä (KESK), is still in government - has rallied around a much more left-wing agenda, including increases for public spending, the lowest pensions and energy taxes. Despite a solid majority in parliament (116 MPs out of 200), the coalition is very fragile, both because of the number of parties and the political spectrum they cover - from the left (VAS, former communist party) to the liberal centre (KESK, which governed with the far right in the previous term).

Despite potential political instability due to party fragmentation, the business environment remains very favourable, particularly with regard to insolvency settlement (1st worldwide), according to the World Bank's Doing Business 2020 report.


Last update : February 2020


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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