World War II left Finland with towering economic problems, including high inflation, unemployment, and an unfavorable balance of trade. Since then the industrial sector has expanded—by the late 1960s more persons were employed in manufacturing than in both agriculture and forestry—and the trade balance has improved. Except for public utilities, industry and business are privately owned. The government, however, exercises considerable control over the economy by means of numerous regulations. The national budget in 1998 anticipated $41.3 billion in revenues and $43.1 billion in expenses. Finland’s gross domestic product (GDP) in 1999 was $129.7 billion.
Finland's economy is based primarily on private ownership and free enterprise; in some sectors, however, the government exercises a monopoly or a leading role. After World War II, Finland was still only semi-industrialized, with a large part of the population engaged in agriculture, mining, and forestry. During the early postwar decades, primary production gave way to industrial development, which in turn yielded to a service- and information-oriented economy. The economy grew especially rapidly in the 1980s, as the country exploited its strong trading relations with both eastern and western European countries. By the early 1990s, however, the country was experiencing economic recession, largely because the collapse of the Soviet Union in 1991 deprived Finland of its chief trading partner. The economy began a slow recovery in the mid-1990s, as Finland refocused its trade primarily toward western Europe.
Finland has a highly industrialized, largely free-market economy, with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important, with exports equaling more than one-third of GDP. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Rapidly increasing integration with Western Europe - Finland was one of the 11 countries joining the euro monetary system (EMU) on 1 January 1999 - will dominate the economic picture over the next several years. Growth in 2001 will be bolstered by strong private consumption, yet may be 1 or 2 points lower than in 2000, largely because of a weakening in export demand.
