The Finnish economy is still going through a period of transition in which it has to adjust to two large structural realignments.

Finland’s cost-competitiveness has improved in recent years. From the perspective of employment there would still be room for further improvement.

How should we measure cost-competitiveness in Finland? We present here the measures of cost-competitiveness in use at the Bank of Finland.

The faster growth will ameliorate the problems in the economy, but not solve them. The industrial base has narrowed, unemployment is high and the public finances are in deficit. It is important to continue the corrective measures in the economy.

A very substantial degree of monetary accommodation is still needed in the euro area for underlying inflation pressures to build up and support inflation in the medium term. More Bank of Finland Bulletin articles will be published in the beginning of April.

Industrial profitability has been linked to fluctuations in export demand, but over the long term it has also followed relative wage developments. The chemical industry has emerged as the most profitable. Most sectors within the metal industry have shown weakened profitability.

Since the financial crisis, consumer prices in Finland have been rising faster than in the euro area on average until recent months.

Resolving the protracted problems in the Finnish economy requires action in three areas. It is necessary to improve cost-competitiveness, continue structural reforms and end growth in the public debt.