In 2015, Finland’s exports volume rose 0.6%. Exports of services increased surprisingly, but goods exports declined. Meanwhile, imports volume in last year declined 0.4%. In Q4 2015, exports volume expanded 0.6% q/q, whereas those of imports increased 2.2% q/q. In 2015, net exports contributed positively to GDP growth.
Finland, amongst euro zone nations, is one of the rare nations to not record much of a real growth in exports in the last three years. The exports volume growth is around 20% lower than its level seen in 2008. Since Nokia’s tumble, exports of goods have been impacted; however, exports have been weak even without Nokia. Weak global demand for investment goods has also impacted exports. Moreover, the country’s deteriorating cost competitiveness has also hit exports. Finland’s price competitiveness has weakened in comparison with Sweden and Germany in the past 10 years.
Unit labor costs increased due to major rise in wages between 2008 and 2012. The country’s relative position is gradually rebounding because of wage moderation. Competitiveness is a main problem in Finnish government’s plan to stimulate growth.
Outlook for Finland’s exports relies majorly on demand from its key markets. Outlook for Finland’s key export markets has continued to be good. If euro area’s investment activity grows, Finland will benefit from it, according to Danske Bank.
“We expect exports to rise by 1.5% in 2016 and 4% in 2017. If Finland regains competitiveness through lower labour costs, exports could grow faster in the medium term”, adds Danske Bank.
