Covid, Inflation, Sanctions & Finnish Economic Resilience

You may think that a small open economy like Finland would be wobbling badly when faced with the challenges of the last two years.

We have the Covid pestilence, the huge jump in energy and food prices, together with sanctions against dealing with Russia that have launched a cruel and destructive invasion of Ukraine without any good reason.

But Finland is doing fine, all things considered, according to the latest economic review from the Ministry of Finanace here in Helsinki.

Growth is still positive and is expected to remain so for the coming years. People have saved cash during Covid and are gradually spending savings now that Covid has pulled back a little. The population has been inoculated and economic activity remains relatively firm. Employment rates are the highest they have been for years and many sectors have difficulty in finding workers.

Fiscal policy remains rather tight because the coalition government wants to keep public debt under control, unlike our southern cousins in Italy and France who keep on avoiding making the necessary economic reforms to improve their weak banks and public finances.


So as of June 2022 the Ministry of Finance forecasts positive but slower growth for the next four years, with inflation falling. 

Higher interest rates are forecast as seen here but these rates are not that high and only have as relatively small impact of the numbers.

They continue to see that the biggest risks facing our economy are the Ukraine war, inflation and interest rates – and none of these were seen as being high risk as you can see from these careful figures.


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