Russia is the fifth largest foreign market for Finland, which is why the economy is a strong, losses from growth of geopolitical tension. The fall in trade in the future could cost the Finnish economy half of annual GDP growth.
WASHINGTON, Nov 17. Finland’s economy has suffered due to geopolitical tension in relations with Russia; further reduction of exports to Russia could cost the country more than 0.2 percentage points of economic growth this year, according to a review of IMF on the economy of Finland.
The IMF’s forecast for economic growth in Finland for 2015 is 0.4%. Thus, further decline in trade with Russia could cost her half of GDP growth. For 2016 the forecast is 0.9%.
“Russia is the fifth largest foreign market for Finland. Negative effects from rising geopolitical tensions may lead to further reduced trade. Depending on the severity of recession in Russia, reducing trade of goods and services may cost more than a couple tenths of a percent GDP growth”, — stated in the review of the IMF.
At the end of July 2014, the EU and the U.S. announced sanctions against several sectors of the Russian economy due to the deterioration of relations between Russia and the West on the background of the conflict in Ukraine. In response, Russia in August 2014 restricted imports of food products from countries that have imposed sanctions against it, and declared the policy of import substitution. In the summer of 2015, the sanctions and retaliatory measures of the Russian Federation were extended for another year.