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Norway vs. Finland

Economy

NorwayFinland
Economy - overview

Norway has a stable economy with a vibrant private sector, a large state sector, and an extensive social safety net. Norway opted out of the EU during a referendum in November 1994. However, as a member of the European Economic Area, Norway partially participates in the EU’s single market and contributes sizably to the EU budget.

The country is richly endowed with natural resources such as oil and gas, fish, forests, and minerals. Norway is a leading producer and the world’s second largest exporter of seafood, after China. The government manages the country’s petroleum resources through extensive regulation. The petroleum sector provides about 9% of jobs, 12% of GDP, 13% of the state’s revenue, and 37% of exports, according to official national estimates. Norway is one of the world's leading petroleum exporters, although oil production is close to 50% below its peak in 2000. Gas production, conversely, has more than doubled since 2000. Although oil production is historically low, it rose in 2016 for the third consecutive year due to the higher production of existing oil fields and to new fields coming on stream. Norway’s domestic electricity production relies almost entirely on hydropower.

In anticipation of eventual declines in oil and gas production, Norway saves state revenue from petroleum sector activities in the world's largest sovereign wealth fund, valued at over $1 trillion at the end of 2017. To help balance the federal budget each year, the government follows a "fiscal rule," which states that spending of revenues from petroleum and fund investments shall correspond to the expected real rate of return on the fund, an amount it estimates is sustainable over time. In February 2017, the government revised the expected rate of return for the fund downward from 4% to 3%.

After solid GDP growth in the 2004-07 period, the economy slowed in 2008, and contracted in 2009, before returning to modest, positive growth from 2010 to 2017. The Norwegian economy has been adjusting to lower energy prices, as demonstrated by growth in labor force participation and employment in 2017. GDP growth was about 1.5% in 2017, driven largely by domestic demand, which has been boosted by the rebound in the labor market and supportive fiscal policies. Economic growth is expected to remain constant or improve slightly in the next few years.

Finland has a highly industrialized, largely free-market economy with per capita GDP almost as high as that of Austria and the Netherlands and slightly above that of Germany and Belgium. Trade is important, with exports accounting for over one-third of GDP in recent years. The government is open to, and actively takes steps to attract, foreign direct investment.

Finland is historically competitive in manufacturing, particularly in the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in export of technology as well as promotion of startups in the information and communications technology, gaming, cleantech, and biotechnology sectors. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the cold climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export industry, provides a secondary occupation for the rural population.

Finland had been one of the best performing economies within the EU before 2009 and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in that year, causing Finland’s economy to contract from 2012 to 2014. The recession affected general government finances and the debt ratio. The economy returned to growth in 2016, posting a 1.9% GDP increase before growing an estimated 3.3% in 2017, supported by a strong increase in investment, private consumption, and net exports. Finnish economists expect GDP to grow a rate of 2-3% in the next few years.

Finland's main challenges will be reducing high labor costs and boosting demand for its exports. In June 2016, the government enacted a Competitiveness Pact aimed at reducing labor costs, increasing hours worked, and introducing more flexibility into the wage bargaining system. As a result, wage growth was nearly flat in 2017. The Government was also seeking to reform the health care system and social services. In the long term, Finland must address a rapidly aging population and decreasing productivity in traditional industries that threaten competitiveness, fiscal sustainability, and economic growth.

GDP (purchasing power parity)
$381.2 billion (2017 est.)
$374 billion (2016 est.)
$370 billion (2015 est.)

note: data are in 2017 dollars

$244.9 billion (2017 est.)
$238.2 billion (2016 est.)
$232.4 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
0.86% (2019 est.)
1.36% (2018 est.)
2.75% (2017 est.)
1.15% (2019 est.)
1.52% (2018 est.)
3.27% (2017 est.)
GDP - per capita (PPP)
$72,100 (2017 est.)
$71,200 (2016 est.)
$71,100 (2015 est.)

note: data are in 2017 dollars

$44,500 (2017 est.)
$43,400 (2016 est.)
$42,500 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 2.3% (2017 est.)
industry: 33.7% (2017 est.)
services: 64% (2017 est.)
agriculture: 2.7% (2017 est.)
industry: 28.2% (2017 est.)
services: 69.1% (2017 est.)
Household income or consumption by percentage share
lowest 10%: 3.8%
highest 10%: 21.2% (2014)
lowest 10%: 6.7%
highest 10%: 45.2% (2013)
Inflation rate (consumer prices)
1.9% (2017 est.)
3.6% (2016 est.)
0.8% (2017 est.)
0.4% (2016 est.)
Labor force
2.699 million (2020 est.)
2.52 million (2020 est.)
Labor force - by occupation
agriculture: 2.1%
industry: 19.3%
services: 78.6% (2016 est.)
agriculture: 4%
industry: 20.7%
services: 75.3% (2017 est.)
Unemployment rate
3.72% (2019 est.)
3.89% (2018 est.)
6.63% (2019 est.)
7.38% (2018 est.)
Distribution of family income - Gini index
26.8 (2010)
25.8 (1995)
27.2 (2016)
22.2 (1995)
Budget
revenues: 217.1 billion (2017 est.)
expenditures: 199.5 billion (2017 est.)
revenues: 134.2 billion (2017 est.)
expenditures: 135.6 billion (2017 est.)

note: Central Government Budget data; these numbers represent a significant reduction from previous official reporting

Industries
petroleum and gas, shipping, fishing, aquaculture, food processing, shipbuilding, pulp and paper products, metals, chemicals, timber, mining, textiles
metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing
Industrial production growth rate
1.5% (2017 est.)
6.2% (2017 est.)
Agriculture - products
barley, wheat, potatoes; pork, beef, veal, milk; fish
barley, wheat, sugar beets, potatoes; dairy cattle; fish
Exports
$102.8 billion (2017 est.)
$88.88 billion (2016 est.)
$67.73 billion (2017 est.)
$51.9 billion (2016 est.)
Exports - commodities
petroleum and petroleum products, machinery and equipment, metals, chemicals, ships, fish
electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber
Exports - partners
UK 21.1%, Germany 15.5%, Netherlands 9.9%, Sweden 6.6%, France 6.4%, Belgium 4.8%, Denmark 4.7%, US 4.6% (2017)
Germany 14.2%, Sweden 10.1%, US 7%, Netherlands 6.8%, China 5.7%, Russia 5.7%, UK 4.5% (2017)
Imports
$95.06 billion (2017 est.)
$74.94 billion (2016 est.)
$65.26 billion (2017 est.)
$58.18 billion (2016 est.)
Imports - commodities
machinery and equipment, chemicals, metals, foodstuffs
foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, computers, electronic industry products, textile yarn and fabrics, grains
Imports - partners
Sweden 11.4%, Germany 11%, China 9.8%, US 6.8%, South Korea 6.7%, Denmark 5.4%, UK 4.7% (2017)
Germany 17.7%, Sweden 15.8%, Russia 13.1%, Netherlands 8.7% (2017)
Debt - external
$642.3 billion (31 March 2016 est.)
$640.1 billion (31 March 2015 est.)
note: Norway is a net external creditor
$150.6 billion (31 December 2016 est.)
$147.8 billion (31 December 2015 est.)
Exchange rates
Norwegian kroner (NOK) per US dollar -
8.308 (2017 est.)
8.3978 (2016 est.)
8.3978 (2015 est.)
8.0646 (2014 est.)
6.3021 (2013 est.)
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
36.5% of GDP (2017 est.)
36.4% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data exclude treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions

61.3% of GDP (2017 est.)
62.9% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions

Reserves of foreign exchange and gold
$65.92 billion (31 December 2017 est.)
$57.46 billion (31 December 2015 est.)
$10.51 billion (31 December 2017 est.)
$11.2 billion (31 December 2016 est.)
Current Account Balance
$16.656 billion (2019 est.)
$31.111 billion (2018 est.)
-$603 million (2019 est.)
-$4.908 billion (2018 est.)
GDP (official exchange rate)
$398.8 billion (2017 est.)
$252.8 billion (2017 est.)
Stock of direct foreign investment - at home
$236.5 billion (31 December 2017 est.)
$219.1 billion (31 December 2016 est.)
$135.2 billion (31 December 2017 est.)
$84.8 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$196.3 billion (31 December 2017 est.)
$191.7 billion (31 December 2016 est.)
$185.6 billion (31 December 2017 est.)
$116.7 billion (2016 est.)
Market value of publicly traded shares
$193.9 billion (31 December 2015 est.)
$219.4 billion (31 December 2014 est.)
$265.4 billion (31 December 2013 est.)
$231 billion (31 December 2016 est.)
$207.5 billion (31 December 2015 est.)
$208.7 billion (31 December 2014 est.)
Central bank discount rate
6.25% (31 December 2010)
1.75% (31 December 2009)
1.25% (31 December 2017)
0% (31 December 2010)

note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate
2.89% (31 December 2017 est.)
2.96% (31 December 2016 est.)
1.61% (31 December 2017 est.)
1.79% (31 December 2016 est.)
Stock of domestic credit
$640.4 billion (31 December 2017 est.)
$571.4 billion (31 December 2016 est.)
$323.9 billion (31 December 2017 est.)
$351.6 billion (31 December 2016 est.)
Stock of narrow money
$237.7 billion (31 December 2017 est.)
$214 billion (31 December 2016 est.)
$152.6 billion (31 December 2017 est.)
$124 billion (31 December 2016 est.)

note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money
$237.7 billion (31 December 2017 est.)
$214 billion (31 December 2016 est.)
$152.6 billion (31 December 2017 est.)
$124 billion (31 December 2016 est.)
Taxes and other revenues
54.4% (of GDP) (2017 est.)
53.1% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
4.4% (of GDP) (2017 est.)
-0.6% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 9.7%
male: 10.7%
female: 8.6% (2018 est.)
total: 17%
male: 17.3%
female: 16.8% (2018 est.)
GDP - composition, by end use
household consumption: 44.8% (2017 est.)
government consumption: 24% (2017 est.)
investment in fixed capital: 24.1% (2017 est.)
investment in inventories: 4.8% (2017 est.)
exports of goods and services: 35.5% (2017 est.)
imports of goods and services: -33.2% (2017 est.)
household consumption: 54.4% (2017 est.)
government consumption: 22.9% (2017 est.)
investment in fixed capital: 22.1% (2017 est.)
investment in inventories: 0.4% (2017 est.)
exports of goods and services: 38.5% (2017 est.)
imports of goods and services: -38.2% (2017 est.)
Gross national saving
34.3% of GDP (2017 est.)
33.1% of GDP (2016 est.)
35.5% of GDP (2015 est.)
23.3% of GDP (2017 est.)
21.7% of GDP (2016 est.)
20% of GDP (2015 est.)

Source: CIA Factbook