But as a relatively poor country, it was vulnerable to shocks to the economy such as the great famine of 1867–1868, which wiped out 15 percent of the population. Until the 1930s, the Finnish economy was predominantly agrarian and, as late as in the 1950s, more than half the population and 40 percent of output were still in the primary sector. ===After World War II=== Property rights were strong.
But as a relatively poor country, it was vulnerable to shocks to the economy such as the great famine of 1867–1868, which wiped out 15 percent of the population. Until the 1930s, the Finnish economy was predominantly agrarian and, as late as in the 1950s, more than half the population and 40 percent of output were still in the primary sector. ===After World War II=== Property rights were strong.
These changes in market conditions induced Finland's farmers to switch from growing staple grains to producing meat and dairy products, setting a pattern that persisted into the late 1980s. In response to the agricultural depression of the 1930s, the government encouraged domestic production by imposing tariffs on agricultural imports.
Barriers to grain imports stimulated a return to mixed farming, and by 1938 Finland's farmers were able to meet roughly 90 percent of the domestic demand for grain. The disruptions caused by the Winter War and the Continuation War caused further food shortages, especially when Finland ceded territory, including about one-tenth of its farmland, to the Soviet Union.
The prolonged worldwide boom, beginning in the late 1940s and lasting until the first oil crisis in 1973, was a challenge that Finland met and from which it emerged with a highly sophisticated and diversified economy, including a new occupational structure.
Many factors contributed to the rapid industrial growth such as war reparations which were largely paid in manufactured products, devaluation of currency in 1945 and 1949, which made dollar rise by 70% against Finish markka and thus boosted exports to the West as well as rebuilding the country which increased demand for industrial products.
According to surveys, between 1945 and the late 1970s foresters had cut trees faster than the forests could regenerate them.
By the end of 1946 industrial output surpassed pre-war numbers.
In the immediate post-war period of 1946 to 1951, industry continued to grow rapidly.
Many factors contributed to the rapid industrial growth such as war reparations which were largely paid in manufactured products, devaluation of currency in 1945 and 1949, which made dollar rise by 70% against Finish markka and thus boosted exports to the West as well as rebuilding the country which increased demand for industrial products.
But as a relatively poor country, it was vulnerable to shocks to the economy such as the great famine of 1867–1868, which wiped out 15 percent of the population. Until the 1930s, the Finnish economy was predominantly agrarian and, as late as in the 1950s, more than half the population and 40 percent of output were still in the primary sector. ===After World War II=== Property rights were strong.
Finland practiced an active exchange rate policy and devaluation was used several times to raise the competitiveness of exporting industries. Between 1950 and 1975, Finland's industry was at the mercy of international economic trends.
By 1984 domestic sources of energy covered only about 20 percent of farm needs, while in 1950 domestic sources had supplied 70 percent of them.
Nevertheless, between the early 1950s and 1981, Finland was able to boost the total area of its forests by some 2.7 million hectares and to increase forest stands under 40 years of age by some 3.2 million hectares.
Transportation and construction, for example, each accounted for between 7 and 8 percent in both 1950 and 1985, and manufacturing's share rose only from 22 to 24 percent.
The greatest change was the decline of the economically active population employed in agriculture and forestry, from approximately 50 percent in 1950 to 10 percent in 1985.
In the immediate post-war period of 1946 to 1951, industry continued to grow rapidly.
In 1951, the Korean War boosted exports.
The fast industrial growth in 1953-1955 was followed by a period of more moderate growth which started in 1956.
The fast industrial growth in 1953-1955 was followed by a period of more moderate growth which started in 1956.
The causes for the deceleration of growth were the general strike of 1956, as well as weakened export trends and easing of the strict regulation of Finland's foreign trade in 1957, which compelled industry to compete against ever toughening international challengers.
The causes for the deceleration of growth were the general strike of 1956, as well as weakened export trends and easing of the strict regulation of Finland's foreign trade in 1957, which compelled industry to compete against ever toughening international challengers.
An economic recession brought industrial output down by 3.4% in 1958.
On the other hand, communists (Finnish People's Democratic League) have received the most votes (23.2%) in 1958 parliamentary elections.
One reason for this was the devaluation of the Finnish markka which increased the value of the US dollar up by 39% against the Finnish markka. International economy was stable in the 1960s.
As a result of the resettlement and land-clearing programs, the area under cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s.
Beginning in 1965, the country instituted plans that called for expanding forest cultivation, draining peatland and waterlogged areas, and replacing slow-growing trees with faster-growing varieties.
In the beginning of the 1970s, Finland's GDP per capita reached the level of Japan and the UK.
In the aftermath of the oil price increases of the early 1970s, farmers began to return to local energy sources such as firewood.
According to surveys, between 1945 and the late 1970s foresters had cut trees faster than the forests could regenerate them.
In the 1970s, the pulp and paper industry accounted for half of Finnish exports.
Finland increased job market regulation in the 1970s to provide stability to manufacturers.
This trend can be seen in Finland as well, where steady growth of industrial output throughout the decade was recorded. After failed experiments with protectionism, Finland eased restrictions and concluded a free trade agreement with the European Community in 1973, making its markets more competitive.
The decline was caused by the free trade agreement that has been made between Finland and the European Community in 1973.
The prolonged worldwide boom, beginning in the late 1940s and lasting until the first oil crisis in 1973, was a challenge that Finland met and from which it emerged with a highly sophisticated and diversified economy, including a new occupational structure.
Finland practiced an active exchange rate policy and devaluation was used several times to raise the competitiveness of exporting industries. Between 1950 and 1975, Finland's industry was at the mercy of international economic trends.
Finland's industrial output declined in 1975.
In 1976 and 1977 growth of industrial output was almost zero, but in 1978 it swung back towards strong growth again.
In 1976 and 1977 growth of industrial output was almost zero, but in 1978 it swung back towards strong growth again.
In 1976 and 1977 growth of industrial output was almost zero, but in 1978 it swung back towards strong growth again.
In 1978 and 1979 industrial output grew at above average rate.
In 1978 and 1979 industrial output grew at above average rate.
Savings rate hovered among the world's highest, at around 8% until the 1980s.
Significant bilateral trade was conducted with the Soviet Union, but this did not grow into a dependence. === Liberalization === Like other Nordic countries, Finland has liberalized its system of economic regulation since late 1980s.
The growth in the 1980s was based on debt, and when the defaults began rolling in, GDP declined by 13% and unemployment increased from a virtual full employment to one fifth of the workforce.
Much of the economic growth in the 1980s was based on debt financing, and the debt defaults led to a savings and loan crisis.
The national currency markka (FIM) was withdrawn from circulation and replaced by the euro (EUR) at the beginning of 2002. == Data == The following table shows the main economic indicators in 1980–2017.
These changes in market conditions induced Finland's farmers to switch from growing staple grains to producing meat and dairy products, setting a pattern that persisted into the late 1980s. In response to the agricultural depression of the 1930s, the government encouraged domestic production by imposing tariffs on agricultural imports.
In 1980 the forested area totaled about 19.8 million hectares, providing 4 hectares of forest per capita—far above the European average of about 0.5 hectares.
The waterway system covered much of the country, and by the 1980s Finland had extended roadways and railroads to areas not served by waterways, effectively opening up all of the country's forest reserves to commercial use. Forestry and farming were closely linked.
In the 1980s, private farmers controlled 35 percent of the country's forests; other persons held 27 percent; the government, 24 percent; private corporations, 9 percent; and municipalities and other public bodies, 5 percent.
Finnish data for the early 1980s showed that 30 to 40 percent of those in occupations not requiring much education were the children of farmers, as were about 25 percent in upper-level occupations, a rate two to three times that of France and noticeably higher than that even of neighboring Sweden.
Nevertheless, between the early 1950s and 1981, Finland was able to boost the total area of its forests by some 2.7 million hectares and to increase forest stands under 40 years of age by some 3.2 million hectares.
By 1984 domestic sources of energy covered only about 20 percent of farm needs, while in 1950 domestic sources had supplied 70 percent of them.
In 1984 the government published the Forest 2000 plan, drawn up by the Ministry of Agriculture and Forestry.
Transportation and construction, for example, each accounted for between 7 and 8 percent in both 1950 and 1985, and manufacturing's share rose only from 22 to 24 percent.
However, both the commercial and the service sectors more than doubled their share of the work force, accounting, respectively, for 21 and 28 percent in 1985.
The greatest change was the decline of the economically active population employed in agriculture and forestry, from approximately 50 percent in 1950 to 10 percent in 1985.
This was caused by a combination of economic overheating (largely due to a change in the banking laws in 1986 which made credit much more accessible), depressed markets with key trading partners (particularly the Swedish and Soviet markets) as well as local markets, slow growth with other trading partners, and the disappearance of the Soviet bilateral trade.
Finnish officials believed that such growth was necessary if Finland was to maintain its share in world markets for wood and paper products. ==Industry== Since the 1990s, Finnish industry, which for centuries had relied on the country's vast forests, has become increasingly dominated by electronics and services, as globalization lead to a decline of more traditional industries.
Nokia supported and greatly benefited from the euro and the European single market, particularly from a common European digital mobile phone standard (GSM), but it failed to adapt when the market shifted to mobile computing. One reason for the popularity of the euro in Finland is the memory of a 'great depression' which began in 1990, with Finland not regaining it competitiveness until approximately a decade later when Finland joined the single currency.
In contrast, during the 1990s, Denmark liberalised its job market, Sweden moved to more decentralised contracts, whereas Finnish trade unions blocked many reforms.
As a result, blue-collar workers' income came, in time, to match more closely the pay of lower level white-collar employees, and the income of the upper middle class declined in relation to that of other groups. The long trend of growth in living standards paired with diminishing differences between social classes was dramatically reversed during the 1990s.
Some state enterprises were privatized and some tax rates were altered. In 1991, the Finnish economy fell into a severe recession.
A total of over 10 billion euros were used to bail out failing banks, which led to banking sector consolidation. After devaluations, the depression bottomed out in 1993. ===European Union=== Finland joined the European Union in 1995.
A total of over 10 billion euros were used to bail out failing banks, which led to banking sector consolidation. After devaluations, the depression bottomed out in 1993. ===European Union=== Finland joined the European Union in 1995.
The growth rate has since been one of the highest of OECD countries and Finland has topped many indicators of national performance. Finland was one of the 11 countries joining the third phase of the Economic and Monetary Union of the European Union, adopting the euro as the country's currency, on 1 January 1999.
In 1999 part-time work rate was one of the smallest in OECD. Future liabilities are dominated by the pension deficit.
In 1984 the government published the Forest 2000 plan, drawn up by the Ministry of Agriculture and Forestry.
However, only around 15% of residents have invested in stock market, compared to 20% in France, and 50% in the US. Between 2000 and 2003, early stage venture capital investments relative to GDP were 8.5 percent against 4 percent in the EU and 11.5 in the US.
In 2000 FDI from Finland to overseas was 20 billion euro and from overseas to Finland 7 billion euro.
The average total household consumption was 20,000 euro, out of which housing at around 5500 euro, transport at around 3000 euro, food and beverages excluding alcoholic at around 2500 euro, recreation and culture at around 2000 euro.
In 2001 Finland's outsourced proportion of spending was below Sweden's and above most other Western European countries.
The national currency markka (FIM) was withdrawn from circulation and replaced by the euro (EUR) at the beginning of 2002. == Data == The following table shows the main economic indicators in 1980–2017.
However, only around 15% of residents have invested in stock market, compared to 20% in France, and 50% in the US. Between 2000 and 2003, early stage venture capital investments relative to GDP were 8.5 percent against 4 percent in the EU and 11.5 in the US.
According to a 2003 report, residents worked on average around 10 years for the same employer and around 5 different jobs over a lifetime.
The Greater Helsinki area generates around a third of GDP. In a 2004 OECD comparison, high-technology manufacturing in Finland ranked second largest after Ireland.
In 2006 it was still considered promising, even though it had not yet become "the new Nokia". ===Pulp and paper industry=== Forest products has been the major export industry in the past, but diversification and growth of the economy has reduced its share.
Most of these have been transformed into regular limited companies, but some are quasi-governmental (liikelaitos), with debt backed by the state, as in the case of VTT. ==Household income and consumption== Finland's income is generated by the approximately 1.8 million private sector workers, who make an average 25.1 euro per hour (before the median 60% tax wedge) in 2007.
Directly held public debt has been reduced to around 32 percent in 2007.
The IMD World Competitiveness Yearbook 2007 ranked Finland 17th most competitive, next to Germany, and lowest of the Nordics.
Some reforms toward more equal marketplace have been made in 2007–2008.
This has led Sweden's economy to prosper at the expense of less sound economies who have been impacted by the 2008 financial crisis.
Sweden's economic performance has therefore been slightly better than Finland's since the financial crisis of 2008.
Finland is ranked 16th (ninth in Europe) in the 2008 Index of Economic Freedom.
The economy of Finland tops the ranking of Global Information Technology 2014 report by the World Economic Forum for concerted output between business sector, scholarly production and the governmental assistance on Information and communications technology. Finland is highly integrated in the global economy, and international trade is a third of GDP.
Upper-level white-collar households (409,653) consumed an average 27,456 euro, lower-level white-collar households (394,313) 20,935 euro, and blue-collar households (471,370) 19,415 euro. ==Unemployment== The unemployment rate was 10.3% in 2015.
Outokumpu is known for developing the flash smelting process for copper production and stainless steel. In 2019, the country was the world's 5th largest producer of chromium, the 17th largest world producer of sulfur and the 20th largest world producer of phosphate With regard to vehicles, the Finnish motor industry consists mostly of manufacturers of tractors (Valtra, formerly Valmet tractor), forest machines (f.ex.
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