Finland’s sickly economy is shrinking again

Stormy weather.
Stormy weather.
Image: Reuters/Markku Ulander/Lehtikuva
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There are a fair few countries with a claim to being called “the sick man of Europe,” but Finland continues to make its case.

The Finnish economy shrank in the second quarter of this year, versus the first quarter, a reversal from a series of better-than-expected results in recent periods. A monthly measure of output fell year-on-year for the first time since 2015, according to data released today.

Although the euro zone’s beleaguered south has captured more attention, the Nordic country’s protracted stagnation grinds on. The Finnish economy is still smaller than it was in 2008. Even Spain regained its pre-crisis growth rate earlier this year.

The decline of Nokia, which at its height accounted for 4% of Finland’s GDP and more than 20% of its exports (pdf), is one factor in Finland’s malaise. The steady decline of the forestry industry and EU sanctions against Russia, which shares an 800-mile border with Finland, haven’t helped, either. Add in a dose of political turmoil and the prognosis for the economy isn’t great.

Although most forecasters expect the Finnish economy to record respectable, if unspectacular, growth this year, it will be a while before the country fully recovers from the global financial crisis. According to the IMF, Finland’s GDP won’t regain its 2008 level until 2020.