Finland’s trade deficit significantly higher than in the previous year

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In terms of annual quarters, exports experienced the largest decline in the second quarter of 2020. The decline was 21.6%. In the first quarter, exports fell 12.3 percent and 11.0 percent in the third quarter. In the last quarter, exports fell 2.5 percent. In the first quarter, imports fell 2.5 percent. In the second quarter, they were down 20.7 percent and in the third quarter by 9.8 percent. In the last quarter, imports fell 6.1 percent. The figures for the last quarter are preliminary.

In December 2020, a ship was exported, worth 950 million euros. The previous year also in December, a ship with almost the same value was exported.

Graph 1. Rate of change of imports and exports by quarter 2019-2020

In 2020, the trade balance deficit increased significantly compared to 2019. According to preliminary data, the trade balance showed a deficit of 2.0 billion euros in 2020. The trade deficit with EU countries rose to 4.0 billion euros. Trade with non-EU countries recorded a surplus. In 2020, the trade surplus amounted to 1.5 billion euros. In 2019, the trade balance deficit amounted to nearly 0.8 billion euros. At that time, trade with other EU countries showed a deficit of 2.3 billion euros and there was a surplus of 1.5 billion euros in trade with third countries. The two years were calculated with the EU27. In 2018, there was a trade deficit of 2.9 billion euros.

Global evolution, in millions of euros (figures for 2020 are based on preliminary statistics)

Exports to EU countries decreased by 12.8% in 2020. Exports to the euro area increased by 13.6%. Exports to non-EU countries fell by 10.7%. Imports from EU countries fell 7.5 percent and imports from other countries fell 13.1 percent. . In 2019, exports to EU countries increased by 2.5% and exports to non-EU countries increased by 1.7%. In 2019, imports from EU countries grew less than exports, by 0.7%. At the same time, imports from non-EU countries fell by 3.5 percent.

The largest drop in imports also affected trade in fuels and lubricants, by 37.4 percent in January-November 2020. The share of imports in this product category was 10.3 percent. Imports of industrial supplies fell 6.6 percent and their share was 30.7 percent. Imports of capital goods fell 4.6 percent and their share of total imports was 21.8 percent. Imports of transport equipment amounted to 12.9 percent and declined by 14.0 percent. In January-November 2020, imports of consumer goods increased by 1.1% (total share 12.0%). However, imports of food and drink products decreased by 2.0% (total share 7.2%).

Figure 2. Evolution of Finland’s imports and exports between 2015 and 2020 (1-11), in percentage, BEC classification.

Figure 3. Finland’s monthly exports, imports and trade balance 2017-2019, in millions of euros

Figure 4. Finland’s annual exports, imports and trade balance between 2005 and 2020, in billions of euros

Imports of machinery, equipment and transportation saw an overall decline of 12.8% in January-November 2020. In 2019, there was a growth of 7.7%. Exports of industrial machinery and equipment fell 4.0% from January-November 2019. Only exports of machinery and power generation equipment increased 5.7%. Exports of machinery and electrical equipment fell 11.2 percent. Exports of transport equipment fell by 29.1% in January-November 2020. Exports of motor vehicles for the transport of people fell by 25.7%. A ship delivery worth 950 million euros took place in December 2020, the previous year also in December, a ship with almost the same value was exported.

The total value of exports from the forest industry sector fell by 18.0% in January-November 2020. In 2019, exports of forest industry products fell by 5.5%. The value of pulp exports fell by 22.2 percent. This drop is due to a drop in prices and export quantities. Exports of sawn timber fell 12.2 percent and exports of wood products fell 11.5 percent. Exports of paper and cardboard fell 18.8 percent.

Figure 5. Change in exports of main category products 2015–2020 (1–11), in percentage, SITC classification.

Decline in imports of goods in all major export sectors in January-November 2020

Imports of machinery and transport equipment fell 9.2% overall in January-November 2020. Their share in total merchandise imports was 33.5%. A year earlier, their imports grew 2.5 percent. Machinery and industrial equipment were imported 11.7 percent less than in the corresponding period of the previous year. Imports of electrical engineering equipment fell 4.2 percent. With regard to electrical equipment, there has been an increase in imports of telephone equipment and parts as well as sound recorders and reproducers. Imports of transport equipment fell 12.4 percent. The value of imports of passenger cars fell 8.2 percent. Imports of metals and metal products fell 10.1 percent. The value of imports of iron and steel fell by 14.2 percent and exports of other metals by 8.3 percent.

The value of imports of petroleum and petroleum products fell 36.3%, and imports of substances and chemicals fell 4.8%. Imports of drugs and pharmaceuticals increased 4.3 percent, while imports of basic chemicals fell 19.4 percent.

Figure 6. Change in imports of main category products 2015–2020 (1–11), in percentage, SITC classification.

Development of trade in goods with the main trading partners in 2020

Finland’s merchandise exports to almost all major exporting countries declined in 2020. Exports to Germany fell by 16.6% and exports to Sweden by 11.2%. Exports to the United States increased 1.4 percent, while exports to the Netherlands declined only 2.9 percent. Exports to Russia fell 17.6 percent. Exports to China fell 13.2 percent and exports to the UK fell 16.0 percent. In 2019, exports to Sweden and the UK were still trending upward. More than half of Finland’s total merchandise exports cover these seven countries. Germany had the largest share with 13.8 percent. Sweden’s share was 10.5 percent and that of the United States 8.5 percent.

Figure 7. Change in the value of Finnish exports to Germany, the Netherlands, the United States, Russia, China, the United Kingdom and Sweden 2015-2020, in percentage.

Figure 8. Change in the value of Finnish imports from Germany, the Netherlands, the United States, Russia, China, the United Kingdom and Sweden 2015-2020, in percentage.

The EU’s share in Finland’s international merchandise trade was 57.1 percent

The UK exited the European Union on January 31, 2020, when it became a non-EU country in terms of international merchandise trade statistics. The share of EU countries in goods imports and exports for the whole of 2020 has been calculated excluding the UK. The UK had a larger share of exports than imports. The EU share in Finland’s merchandise exports was 54.6% in 2020 according to the calculation based on 27 Member States. In 2019, the EU’s share was 59.3% according to the calculation based on 28 Member States.

EU member states accounted for 59.5% of Finland’s goods imports in 2020 based on 27 member states. In 2019, the EU’s share was 60.6% based on 28 Member States. The shares of trade with non-EU countries have changed accordingly. Last year, foreign trade accounted for 45.4% of exports and 40.5% of imports, while the corresponding share in 2019 was 40.7% in exports and 39.4% in imports.

Evolution of EU exports in 2020

Total merchandise exports of the EU27 fell by 9.2 percent between January and November 2020. Finland’s exports fell by 14 percent in the corresponding period. Only one EU member state, Ireland, increased its exports by 4%. The decline in Finnish exports was the third highest among EU countries in January-November 2020.

For Finland’s main trading partners, the decline in exports varied. Sweden’s exports fell by 6 percent and Germany’s by 10 percent. Exports from the Netherlands fell by seven percent and those from Belgium by nine percent. Exports from Greece, Spain and Italy fell 11 percent.

Source: Eurostat comext database


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