Estudios Económicos


Population 5.5 million
GDP 48,810 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2018 2019 2020 (e) 2021 (f)
GDP growth (%) 1.5 2.2 -3.4 3.4
Inflation (yearly average, %) 1.1 1.0 0.3 0.9
Budget balance (% GDP) -0.9 -1.1 -7.2 -3.4
Current account balance (% GDP) -1.9 -0.2 -0.5 -1.2
Public debt (% GDP) 59.5 59.2 67.8 68.8

(e): Estimate (f): Forecast


  • Prudent economic policy overall
  • Skilled workforce and favourable business climate
  • High standard of living
  • Economic growth not dependent on foreign tourists


  • Highly vulnerable to international economic conditions (goods & services exports = 37% of GDP)
  • Crisis in the important Finnish electronic sector, as well as in the metals sector, and loss of competitiveness
  • Dependence of the Finnish banking sector on the Swedish and Danish financial sectors, despite the return of a major institution in 2017
  • Ageing population (in 2020, 21% of the population are pensioners)

Risk assessment

Slow recovery after a mild recession

A slow economic recovery is expected in 2021, after the Finish economy went into a recession in 2020 because of the global COVID-19 pandemic. After COVID-19 hit Finland in early 2020, the government reacted fast with restrictive measures from mid-March to early-May. Public life came to a standstill, the Helsinki-Uusimaa region was quarantined for three weeks, gatherings were limited to 10 people and borders were closed. However, shops remained open. These measures helped to contain the number of COVID-19 cases at a very modest level. A second wave starting in early autumn of 2020 turned out to be significantly stronger. The renewed restrictive measures entailed another economic contraction. In the first half of 2020, GDP dropped only by 3.8% in yearly comparison (EU: -24.5% YoY). In addition to the mild development of the pandemic and the relatively milder restrictions, industrial production did not plummet as factories did not close. The backlog of orders before the COVID-19 outbreak was higher, as the Finish industry focuses more on investment goods with longer production times. Furthermore, Finland is less dependent on tourism than other European countries (indeed, the tourism balance is negative). Moreover, the recession in 2020 was cushioned somewhat by the additional fiscal support measures that had a total value of approximately EUR 17 billion or 7.1% of GDP, mainly in the form of support to the health care system, deferrals of tax and pension payments, grants to SMEs, as well as the expansion of parental allowances and the unemployment insurance.

For 2021 we expect a lively recovery, which will be dependent on the further development of the pandemic and the vaccination campaign. The main dynamic should come from private consumption (51% of GDP), generally supported by high welfare state expenditures (24% of GDP). The unemployment rate, which increased significantly in spring 2020 despite the extensive use of furlough, should return to more moderate levels in 2021 and support - alongside a modest wage growth and a low inflation rate - private consumption. Some of the fiscal measures adopted in 2020, such as public investment projects amounting to EUR 1 billion, should foster the economic recovery in 2021. Conversely, private investment expenditures should remain subdued as long as global economic uncertainty remains. The outlook for exports remains highly dependent on the industrial situation in Germany, Sweden, the United States and China, as Finland mainly exports investment goods. Services exports, mainly ICT and business services, should remain strong. Additional support will come from the ECB, which extended its asset purchases by EUR 500 bn. up to EUR 1850 bn., so that it has enough liquidity to buy assets in an unchanged manner until the end of March 2022. Further T-LTROS for an unchanged high credit supply are in the pipeline, too.


Public debt surges

Finland’s current account deficit will probably increase moderately in 2021, as the surplus of the goods-trade balance will shrink due to reduced demand for investment goods. Despite still robust services exports, the services trade balance should remain structurally negative (due to Finnish tourists abroad) and, combined with the high foreign direct investments, be the main reason for the persisting current account deficit. The general government budget deficit, which surged in 2020, should decrease somewhat but remain above the Maastricht target of 3% in 2021. This should lead to a record general government debt of above 70% of GDP.


COVID-19 led to a confidence boost for the government

Social Democrat (SDP) PM Sanna Marin is leading a centre-left coalition with four other parties – the Centre Party (KESK), the Green League (VIHR, environmentalist), the Left Alliance (VAS) and the Swedish People’s Party (SFP, centre). The government, especially the SDP, gained a lot of support as 79% of the population were satisfied about the government’s handling of the COVID-19 crisis in spring and summer of 2020. The SDP is now clearly leading in polls, while the right-wing populist Finns party, the biggest opposition party in parliament, lost the extra support gained between the last election in spring 2019 and early 2020. The government’s position in the negotiations on the EU Recovery Fund could be another reason behind this development, as PM Marin was part of “the frugal five” (an alliance supporting a frugal and strict fiscal policy in the EU). Thanks to the latest boost in support, the government coalition and PM Marin are expected to last until the next parliamentary elections in 2023.


Last updated: March 2021


Bills of exchange are not commonly used in Finland because they signal the supplier’s distrust of the buyer. A bill of exchange primarily substantiates a claim and constitutes a valid acknowledgment of debt.


Cheques, also little used in domestic and international transactions, only constitute acknowledgement of debt. However, cheques that are uncovered at the time of issue can result in the issuers being liable to criminal penalties. Moreover, as cheque collection takes a particularly long time in Finland (20 days for domestic cheques or cheques drawn in European and Mediterranean coastal countries; 70 days for cheques drawn outside Europe), this payment method is not recommended.


Conversely, SWIFT bank transfers are increasingly used to settle domestic and international commercial transactions. When using this instrument, sellers are advised to provide full and accurate bank details to facilitate timely payment, while it should not be forgotten that the transfer payment order will ultimately depend on the buyer’s good faith. Banks in Finland have adopted the SEPA standards for euro-denominated payments.

Debt collection

Amicable phase

The goal of the amicable phase is to reach a voluntary settlement between the creditor and debtor without beginning legal proceedings. Finnish legislation obliges creditors to begin the amicable phase amicable phase via letters, followed up as necessary with a final demand for payment by recorded delivery or ordinary mail. This demand for payment asks the debtor to pay the outstanding principal increased by past-due interest as stipulated in the contract.


In the absence of an interest rate clause in the agreement, interest automatically accrues from the due date of the unpaid invoice at a rate equal to the central bank of Finland’s (Suomen Pankki) six-monthly rate, calculated by reference to the European Central Bank’s refinancing rate, plus seven percentage points.

The Interest Act (Korkolaki) already required debtors to pay up within contractually agreed timeframes or become liable to interest penalties.


Since 2004, the ordinary statute of limitations for Finnish contract law is three years.


Legal proceedings
Fast-track proceedings

For clear and uncontested claims, creditors may use the fast-track procedure, resulting in an injunction to pay (suppea haastehakemus). This is a simple written procedure based on submission of whatever documents substantiate the claim (invoices, bills of exchange, acknowledgement of debt, etc.). The court sets a time limit of approximately two weeks to permit the defendant to either respond to or oppose the petition. In addition, this fast track procedure can also be initiated electronically for cases of undisputed claims. The presence of a lawyer, although commonplace, is not required for this type of action.


Ordinary proceedings

Ordinary legal action usually commences when amicable collection has failed. A written application for summons must be addressed to the registry of the District Court, which then serves the debtor with a Writ of Summons. The debtor is given approximately two weeks to file a defence.


During the preliminary hearing, the court bases its deliberations on the parties’ written submissions and supporting documentation. The court then convokes the litigants to hear their arguments and decide on the relevance of the evidence. During this preliminary phase, and with the judge’s assistance, it is possible for the litigants to resolve their dispute via mediation and subsequently protect their business relationship.


Where the dispute remains unresolved after this preliminary hearing, plenary proceedings are held before the court of first instance (Käräjäoikeus) comprising between one and three presiding judges, depending on the case’s complexity.


During this hearing, the judge examines the submitted evidence and hears the parties’ witnesses. The litigants then state their final claims, before the judge delivers the ruling, generally within 14 days.


The losing party is liable for all or part of the legal costs (depending on the judgement) incurred by the winning party. The average time required for obtaining a writ of execution is about 12 months. Undisputed claims in Finland can normally last from three to six months. Disputed claims and the subsequent legal proceedings can take up to a year.


Commercial cases are generally heard by civil courts, although a Market Court (Markkinaoikeus) located in Helsinki has been in operation as a single entity since 2002, following a merger of the Competition Council and the former Market Court.

Enforcement of a Court decision

A judgment is enforceable for fifteen years as soon as it becomes final. If the debtor fails to comply with the judgment, the creditor may have it enforced by a bailiff, who will try to obtain an instalment agreement with the debtor, or enforce it through a seizure of assets.


For foreign awards, since Finland is part of the EU, it has adopted enforcement mechanisms applicable to court decisions issued by other EU members, such as the EU Payment Order and the European Enforcement Order. For judgments issued by non-EU members, the issuing country must be part of a bilateral or multilateral agreement with Finland.

Insolvency proceedings

Out-of-Court proceedings

Finnish law provides no specific rules for out-of-court settlements. Negotiations between creditors and debtors are made informally. If an agreement is reached, it must still be validated by the court.


Restructuring proceedings

The goal of restructuring is to allow an insolvent company to remain operational through administration, with the view that if the company is able to continue its business, it will be able to repay a larger part of its debts than would have been possible in the case of bankruptcy of the company. The commencement of these proceedings triggers an automatic moratorium, providing the company with protection from its creditors.


The board of directors maintains its power of decision but the receiver is entitled to control certain aspects of the company’s operations, including the creation of new debts and overseeing transfers of ownership.



When debtors are unable to pay their debts when due and this inability is not temporary, they are placed into liquidation. Upon acceptance of a liquidation petition by the court, the debtor is declared bankrupt. A receiver is appointed, and a time limit is established for any creditors to present their claims. The receiver then establishes a proposed distribution scheme, whilst creditors supervise the selling of the estate and the distribution of the sales’ proceeds.

Insolvency trend Finland
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