OECD Economic Surveys: Finland

English
Frequency
Every 18 months
ISSN: 
1999-0545 (online)
ISSN: 
1995-3488 (print)
http://dx.doi.org/10.1787/19990545
Next Edition: 28 Feb 2018
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OECD’s periodic surveys of the Finnish economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Finland 2016

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Author(s):
OECD
28 Jan 2016
Pages:
104
ISBN:
9789264250291 (PDF) ; 9789264250307 (EPUB) ;9789264250284(print)
http://dx.doi.org/10.1787/eco_surveys-fin-2016-en

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This 2016 OECD Economic Survey of Finland examines recent economic developments, policies and prospects. The special chapters cover: Productivity and Employment and Skills.

 

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  • Basic statistics of Finland, 2014

    This Survey is published on the responsibility of the Economic and Development Review Committee (EDRC) of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Finland were reviewed by the Committee on 3 December 2015. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 23 December 2015.The Secretariat’s draft report was prepared for the Committee by Christophe André and Jon Pareliussen, with contributions from Thomas Chalaux, under the supervision of Vincent Koen. Secretarial assistance was provided by Mercedes Burgos.The previous Survey of Finland was issued in February 2014.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at www.oecd.org/eco/surveys.

  • Executive summary

    Finland enjoys a high level of income and well-being. Nevertheless, output has been dragged down by the global downturn, the decline of the electronics and paper industries and the Russian recession. Unemployment is rising rapidly, but social safety nets keep income inequality low. The general government deficit is above 3% of GDP and gross debt will rise above 60% of GDP in 2015. The government has an ambitious programme to restore competitiveness and fiscal sustainability through budgetary measures and structural reforms.

  • Assessment and recommendations

    Finland has been hit hard by several shocks, in addition to the global economic slowdown. Electronic exports, demand for paper and exports to Russia have collapsed. This has durably lowered the economic growth potential. Furthermore, the population is ageing rapidly. Against this background, the key messages of this Survey are:

  • Progress in structural reform

    This table reviews action taken on key recommendations from previous Surveys. Recommendations that are new in this Surveys are listed at the end of the relevant chapter.

  • Government debt scenarios

    The debt dynamics simulations presented in this document are based on OECD estimates for long-term output growth and expenditures on pensions, health and long-term care. Over the long term, potential real GDP is assumed to increase by 1.5% and the GDP deflator by 2% per year (Johansson et al., 2013). Pension costs mount with ageing (OECD, 2013c). The baseline scenario (No policy action) does not incorporate the impact of the pension reform to be implemented from 2017. Public health and long-term care expenditure projections are based on the cost-containment scenario in De la Maisonneuve and Oliveira Martins (2013), in which the increase in public health and long-term care spending between 2010 and 2060 is contained to about 2.5 percentage points of GDP. Although precise quantification is challenging, such an outcome seems plausible if the social welfare and health care reform is successfully implemented.

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    • Boosting productivity

      Boosting productivity growth is necessary to raise living standards and well-being for all. Aggregate productivity has fallen, mainly driven by manufacturing, although service industries have also tended to underperform. Reviving productivity requires improving framework conditions further so labour and capital can more easily move to the most dynamic sectors and firms, making the tax system more growth-friendly, and supporting innovation, basic research and young firms’ financing.

    • Employment and skills

      Employment fosters equity and economic inclusiveness because those out of work face the highest risk of poverty, and it generates the tax receipts on which the social safety net depends. Further enhancing education and life-long learning would lower hurdles to employment, which are high for the low-skilled. Policies to speed up tertiary graduation, improve work incentives and activation of the unemployed and postpone labour market exit are necessary to bring the employment rate closer to the level of other Nordics. Easing employment regulations and allowing more flexible wage setting would increase both employment and productivity.

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