enced an
average of 4.9% annual growth between 1987 and 1989, sank into deep
recession in 1991 as growth contracted by 6.5%. The recession - which
continued in 1992 with growth contracting by 3.5% - 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 EC's
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. By boosting the
competitiveness of Finnish exports, these measures presumably have kept the
economic downturn from being even more severe. Unemployment probably will
remain a serious problem during the next few years - monthly figures in
early 1993 are approaching 20% - with the majority of Finnish firms facing a
weak domestic market and the troubled German and Swedish export markets.
Declining revenues, increased transfer payments, and extensive funding to
bail out the banking system are expected to push the central government's
budget deficit to nearly 13% in 1993. Helsinki continues to harmonize its
economic policies with those of the EC during Finland's current EC
membership bid.
National product:
GDP - purchasing power equivalent - $79.4 billion (1992)
National product real growth rate:
-3.5% (1992)
National product per capita:
$15,900 (1992)
Inflation rate (consumer prices):
2.1% (1992)
Unemployment rate:
13.1% (1992)
Budget:
revenues $26.8 billion; expenditures $40.6 billion, including capital
expenditures of $NA (1992)
Exports:
$24.0 billion (f.o.b., 1992)
commodities:
timber, paper and pulp, ships, machinery, clothing and footwear
partners:
EC 53.2% (Germany 15.6%, UK 10.7%), EFTA 19.5% (Sweden 12.8%), US 5.9%,
Japan 1.3%, Russia 2.8% (1992)
Imports:
$21.2 billion (c.i.f., 1992)
commodities:
foodstuffs, petroleum and petroleum products, chemicals, t