Country Report Finland November 2009

Outlook for 2010-11

• Despite revelations of campaign finance irregularities and disagreements between the parties, the Economist Intelligence Unit believes that the four-party coalition will serve out its term to early 2011.
• The government will continue to focus on responding to the still-weak economy, and fiscal policy will remain expansionary. The public finances will go into deficit from 2009.
• Fading inventory reductions and an upturn in domestic and external demand will see the economy improve over 2010-11. Yet growth will remain weak, following the economy's severe contraction in 2009.
• After an estimated contraction of 7.1% in 2009, we expect a slow improvement, with the economy forecast to grow by 0.7% and 1.6% in 2010 and 2011, respectively.
• We expect inflation to remain above the euro area average over 2010-11, at 1.2% and 1.9%, respectively (according to the EU harmonised measure), following an estimated 1.6% in 2009.
• With markedly weaker export and import demand than in recent years, the current-account balance is forecast to record small surpluses over 2010 and 2011, of 0.9% and 1.9%, respectively, following an estimated 0.4% in 2009.

Monthly review

• In mid-October the government presented a new long-term climate and energy policy strategy, under which Finland should aim to cut its greenhouse gas emissions by 80% compared with its 1990 level by 2050.
• A miscommunication concerning Finnish troops in Afghanistan in October highlighted the ambiguity between the president and the government in conducting foreign policy.
• The social partners have widely welcomed the first agreement of the new wage round, which provides for moderate pay increases.
• The government has approved the application of Nord Stream, a German-Russian joint venture, to build a 1,200-km pipeline to deliver gas from Russia to Germany.
• The latest economic data releases generally point to a gradual improvement in the economy, but any improvement in the GDP figures for the third quarter is likely to be marginal.
• Difficult economic circumstances contributed to a weak set of third-quarter results for Finland's telecommunications giant, Nokia. Revenue was down by almost 20% in year-on-year terms in the three months to September 2009.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49
NAICS Code: 22

• Highlights
• Outlook for 2010-11: Domestic politics
• Outlook for 2010-11: International relations
• Outlook for 2010-11: Policy trends
• Outlook for 2010-11: Fiscal policy
• Outlook for 2010-11: Monetary policy
• Outlook for 2010-11: International assumptions
• Outlook for 2010-11: Economic growth
• Outlook for 2010-11: Inflation
• Outlook for 2010-11: Exchange rates
• Outlook for 2010-11: External sector
• Outlook for 2010-11: Forecast summary
• The political scene: Long-term climate and energy strategy is introduced
• The political scene: Confusion surrounds troops in Afghanistan
• Economic policy: Beginning of new wage round leads to moderate pay increase
• Economic policy: Government approves Nord Stream gas project
• Economic performance: Signs of gradual improvement in economy appear
• Economic performance: Foreign trade has yet to revive
• Economic performance: Nokia posts weak third-quarter results
• Data and charts: Annual data and forecast
• Data and charts: Quarterly data
• Data and charts: Monthly data
• Data and charts: Annual trends charts
• Data and charts: Monthly trends charts
• Data and charts: Comparative economic indicators
• Basic data
• Political structure