Economic Analysis


Population 5.5 million
GDP per capita 53,774 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2020 2021 2022 (e) 2023 (f)
GDP growth (%) -2.3 3.1 2.0 -0.2
Inflation (yearly average, %) 0.3 2.2 7.1 6.6
Budget balance (% GDP) -5.5 -2.7 -1.4 -2.3
Current account balance (% GDP) 0.6 0.5 -3.9 -1.8
Public debt (% GDP) 74.7 72.5 71.8 71.4

(e): Estimate (f): Forecast


  • Favorable business climate, strong institutions and high standard of living
  • Economic growth independent of Russian tourists (Finland has a negative structural tourism service balance)
  • Strong ICT-sector that is rapidly adapting to global changes
  • High green capital thanks to forests covering 65% of land
  • Finland is part of the eurozone and is a member of NATO from April 2023.


  • Highly vulnerable to international economic conditions (goods and services exports = 40% of GDP in 2019, before the pandemic)
  • Direct neighbour of Russia (the common border is around 1,340 km long). Finland was part of the Russian empire between 1809 and 1917
  • Dependence of the Finnish banking sector on the Swedish and Danish financial sectors, despite the return of a major institution in 2017
  • Rapidly ageing population (33.1% of the population were pensioners at the end of 2021)
  • Labour market inflexibility has led to relatively high structural unemployment (a 6% unemployment rate is considered full employment) and job shortages in certain areas and sectors

Risk assessment

Finland’s economy is set for a slight recession in 2023

After robust economic growth in the first half of 2022 driven by strong private and public consumption, the Finnish economy saw a slowdown in the second half of the year and went into a technical recession. The economic slowdown is expected to continue in 2023 due to high energy prices and inflation. In addition, Finland lost its third supplier due to sanctions and trading embargoes against Russia, which is also dragging on economic development. On the export side, goods are diversified (manufacturing goods as well as mining and forestry equipment) and could be reallocated. However, on the import side, the process of rearranging trade flows will be more challenging as unprocessed fuels and lubricants accounted for 58.2% of all Finnish imports of goods from Russia. Another 39.1% were industrial production supplies, as many Finnish companies outsourced some of their production stages to Russia and imported them back for their final stage to Finland. These companies are currently reconsidering the production chain set-up. Regarding Finnish energy supply, a large share of oil imports from Russia were already substituted in 2022 by imports from Sweden and Norway, while its crucial gas imports (7% of all final energy consumption in Finland) should be compensated by imports of Liquefied Natural Gas (LNG). The Finnish-Estonian FSRU (floating storage and regasification unit) based in the Finnish port of Inkoo began working in late 2022 and should boost energy supply for Finland and the Baltic states. Finland has also expanded its nuclear power industry (accounting for over 19% of the energy mix in 2021). The Olkilouto 3 nuclear reactor started electricity production in December 2022 and made up the energy shortfall following import cuts from Russia. However, this agile adaptation to new circumstances incurred higher costs and will probably result in lower profits for Finnish companies. These aspects will weigh on household purchasing power as well. Many consumers are likely to change their spending habits and consume less in early spring. In 2022, the average inflation rate reached 7.1%, its highest level since 1983. It is expected that consumer prices will increase further throughout 2023, but at a slower pace. The ECB resolved to take firm action to fight strong inflationary pressures and, after halting its QE programme in spring 2022, already moved to hike its main refinancing interest rate by 350 basis points to 3.5% by the end of Q1 2023. Given persistently high inflation which has settled far above the central bank target of 2%, the ECB will probably perform additional hikes, totalling around +50 bps, in the coming meetings, and probably maintain the rate throughout 2023. These rate increases would put further pressure on consumption and investment. In addition, geopolitical uncertainty is likely to weigh on private investment.


Current account balance swings back to deficit

After two years in slight surplus, Finland’s current account may have returned to negative territory in 2022, where it should remain this year. The main factor for this change has been the goods trade deficit, as nominal exports have decreased due to the loss of trade with Russia and weak economic growth across its Western European trade partners. Elevated import prices and a weak euro are also dragging on the balance. In addition, the structural services deficit has broadened as an increasing number of Finns have holidayed abroad. The primary income balance (investment revenues) experienced a minor surplus due to smaller revenue from Finnish companies’ investments abroad due to weaker financial markets in the US and Europe. Balance of transfer income (remittances) will remain structurally negative. In 2023, improved trade in goods could improve the current-account balance somewhat. The public deficit should widen slightly as the government intends to maintain its robust support to combat high energy prices and to increase spending on defence capabilities as well as on the healthcare system. Meanwhile, public debt is expected to stabilise and remain above the Maastricht target of 60%. 


New government and officially a NATO member

Finland had a general election in April 2023 in which the incumbent, Social Democrat (SDP) Prime Minister Sanna Marin, and her coalition lost their majority. Petteri Orpo, the leader of the centre-right National Coalition Party (NCP), is expected to become the next Prime minister as his party became the largest (48 out of 200 seats) at the election. Petteri Orpo went into the election with a focus on defence, along with the SDP, but also restoring healthy government finances by bringing the deficit down.

Negotiations will be difficult as he will have to form a government with either the SDP, with whom he fundamentally disagrees on welfare policies, or the Finns Party, with whom he fundamentally disagrees on immigration policies. It is believed that the NCP will prefer to form a government with the Finns Party, but that a coalition with the SDP is also a possibility. In both cases, support from a smaller party will be necessary for a majority.

Finland had their membership application to NATO accepted and officially became a member of the alliance in April 2023. This will result in an increase in defence spending in 2023 and the foreseeable future as defence was an important part of the NCP’s agenda during the election.


Last updated: April 2023


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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