Performance Overview
Finland continues to slide down the rankings and is now 8th. Historically characterized by relatively low diversification of economic sectors and export destinations, the Finnish economy has suffered successive shocks to its main industries (information technology and paper) and one of its largest export markets (the Russia). Its trade balance turned negative in 2011, and in 2014 its GDP was still 6 percent smaller than in 2008. Yet robust fundamentals could help Finland to overcome the current crisis. Its public institutions are transparent and efficient (1st), its higher education and training system is among the best in the world (2nd), and its business sector is one of the most innovative (2nd overall and 4th for PCT patent applications per capita). To facilitate the recovery, Finland should fix long-standing rigidities in its labor market (26th), especially the centralized wage-bargaining system (140th, the most centralized in our rankings), which contributes to unemployment (currently at 9.5 percent). Although still one of the best among advanced economies, its macroeconomic environment has also deteriorated significantly during the crisis, with public debt increasing by 20 percentage points as a proportion of GDP since 2006 and public deficit further increasing in 2014 to 2.7 percent of GDP.
Performance OverviewFinland continues to slide down the rankings and is now 8th. Historically characterized by relatively low diversification of economic sectors and export destinations, the Finnish economy has suffered successive shocks to its main industries (information technology and paper) and one of its largest export markets (the Russia). Its trade balance turned negative in 2011, and in 2014 its GDP was still 6 percent smaller than in 2008. Yet robust fundamentals could help Finland to overcome the current crisis. Its public institutions are transparent and efficient (1st), its higher education and training system is among the best in the world (2nd), and its business sector is one of the most innovative (2nd overall and 4th for PCT patent applications per capita). To facilitate the recovery, Finland should fix long-standing rigidities in its labor market (26th), especially the centralized wage-bargaining system (140th, the most centralized in our rankings), which contributes to unemployment (currently at 9.5 percent). Although still one of the best among advanced economies, its macroeconomic environment has also deteriorated significantly during the crisis, with public debt increasing by 20 percentage points as a proportion of GDP since 2006 and public deficit further increasing in 2014 to 2.7 percent of GDP.
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