Finnish Balance of Payments: an overview of the past and future prospects
Hilpinen, Jorma (12.12.2007)
JulkaisusarjaSuomen Pankki. BoF Online
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-20140807709
This paper1 treats Finnish Balance of Payments time series from the 1960's to the present. It also discusses future current account prospects. Comparable National Accounts and Balance of Payments time series with current major breakdowns are available2 in the current account from 1950 on and in the financial account from 1975 on. The old financial account time series from 1950 on follow a previous classification system where loans and bonds were not distinguished between. In practise, financial flows and stocks other than long term bank loans and bonds were nonexistent due to the foreign exchange controls then in place. The sum of these two plus trade related flows and change in reserves equalled current account. The figures in the charts attached are expressed in relation to the nominal GDP, where relevant. Foreign trade in goods was deregulated in Finland in 1957 and the first steps towards European integration were taken in the form of the 1961 EFTA agreement as signs of return to normalised economic conditions after the War. The 1990's recession represents a major milestone in Finnish economic history dividing a number of economic processes into before and after periods. Another watershed is the EU and the EMU membership in 1995 and in 1999, respectively3. Other major factors lie behind recent Finnish economic developments: The ICT revolution and phenomena like Nokia is one occurring in the 1990's after the recession, and the other is todays' integration and globalisation process, as seen in the China syndrome originating this millennium.