Finland:Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing

Finland is a small open economy that is significantly exposed to global financial and economic conditions. Following the Global Financial Crisis (GFC), Finland entered a long recession led by the decline of its information and communications technology (ICT) sector. With the implementation of some structural reforms, Finland’s competitiveness improved, as did growth and employment, albeit at a lower rate of growth. The economy was less significantly affected by the COVID-19 pandemic relative to other economies, thanks to its low exposure to service-intensive economic sectors, fiscal policy, and other interventions. However, Finland is now navigating a weaker economic outlook given the war in Ukraine, despite limited direct exposures to Russia.