The Finnish and Baltic economies have all experienced strong economic growth in the past year. Growth has been particularly strong in the Baltics. In the section below we have gathered a broad range of macroeconomic data covering Finland, Estonia, Latvia and Lithuania.
The Finnish economyThe Finnish economy is on a path of continued growth and stability:
- GDP growth of approx. 3% expected in 2007-2008 after 5% in 2006
- Further decrease in the unemployment rate expected
- Public sector share of GDP expected to remain relatively stable
- Growth is accompanied by rising inflation, although it is coming from a low base and is converging with EU levels
- Real house prices in Finland rose by approx. 6% p.a. from 1995-2004, against approx. 4% in Denmark during the same period, with a recent acceleration in price increases, in particular in the Helsinki region
| Population, total (millions) |
5.2 |
| Population growth (annual %) |
0.3 |
| GDP (current US$, billions) |
193.2 |
| GDP growth (annual %) |
5.5 |
| GNI per capita, Atlas method (current US$) |
37,460 |
| Inflation, consumer prices (annual %) |
1.6 |
| Unemployment, total (% of total labour force) |
7.9 |
| Internet users (per 1,000 people) |
628.5 |
| Sovereign debt rating (Moody's/S&P) |
AAA/AAA |
Source: The World Bank.
The Finnish banking market
The Finnish banking market is seeing a positive business environment driving growth. This is due to good macroeconomic conditions and strong consumer confidence. The market is also characterised by good credit quality.
The Finnish banking sector is more profitable and cost-effective than the EU sector overall due to the rapid adaptation of new technology, expansion of banking markets and the rationalisation of the banking sector after the crisis in the early 1990s. However, as on most other markets, margins are under pressure because of intense competition among banks.
Finnish banks have succeeded in using technology to reduce cost and improve efficiency:
- Internet penetration ratio is very high in the region
- Banks and their customers is open to innovations
- Banks have been able to price their services and to induce customers towards greater use of technology
- Among the Nordic countries, Finland leads in the number of credit transfers per capita
- High technology usage have resulted in a reduction of the number of ATMs and the number of employees per capita