and engineering industries. Trade is
important, with the export of goods representing about 30% of GDP.
Except for timber and several minerals, Finland depends on imports
of raw materials, energy, and some components for manufactured
goods. Because of the climate, agricultural development is limited
to maintaining self-sufficiency in basic products. Forestry, an
important export earner, provides a secondary occupation for the
rural population. The economy, which experienced an average of 4.9%
annual growth between 1987 and 1989, sank into deep recession in
1991 as GDP contracted by 6.5%. The recession - which continued in
1992 with GDP contracting by 4.1% - has been caused by economic
overheating, depressed foreign markets, and the dismantling of the
barter system between Finland and the former Soviet Union under
which Soviet oil and gas had been exchanged for Finnish manufactured
goods. The Finnish Government has proposed efforts to increase
industrial competitiveness and efficiency by an increase in exports
to Western markets, cuts in public expenditures, partial
privatization of state enterprises, and changes in monetary policy.
In June 1991 Helsinki had tied the markka to the European Union's
(EU) European Currency Unit (ECU) to promote stability. Ongoing
speculation resulting from a lack of confidence in the government's
policies forced Helsinki to devalue the markka by about 12% in
November 1991 and to indefinitely break the link in September 1992.
The devaluations have boosted the competitiveness of Finnish
exports. The recession bottomed out in 1993, and Finland
participated in the general European upturn of 1994. Unemployment
probably will remain a serious problem during the next few years;
the majority of Finnish firms face a weak domestic market and the
troubled German and Swedish export markets. The Finns voted in an
October 1994 referendum to enter the EU, and Finland officially
joined the Union on 1 January 1995. Increasing integration with
Western Europe will dominate the economic picture over the next few
years.

GDP: purchasing power parity - $92.4 billion (1995 est.)

GDP real growth rate: 5% (1995 est.)

GDP per capita: $18,200 (1995 est.)

GDP composition by sector:
agriculture: 4.6%
industry: 28%
services: 67.4% (1994)

Inflation rate (consumer prices): 2% (1995 est.)

Labor force: 2.533 million
by occupation: public