With its Nordic peer group, Finland shares good economic fundamentals such as low inflation, relatively low government debt and low exposure to fiscal risks. In its favour it can also count a low budget deficit, which it seeks to narrow further in 2013. Some risks remain, however, above all the larger-than-median current account deficit, which is higher than the western European average and also the highest among its Nordic peers.
In terms of economic disparity, the Nordic countries are relatively homogenous and fare well, especially when compared to their western European peer group. The Nordic economic and political model with its high taxes and comprehensive social security systems is clearly effective in dampening the European trend towards greater income and wealth inequality. The ﬂip side of the coin, however, is the strong exposure to demographic shifts, such as an aging population, which make pension and social security benefits at current levels unsustainable in the medium- to long run. An exception is Norway, which can use its sovereign wealth fund to fulﬁl its pension liabilities and social security obligations.
NOTE The risk bars indicate the world distribution of the particular risk, from the lowest scoring country to the highest. The lower the score, the lower the risk or exposure to the particular indicator (i.e. a lower score is always positive).
All data is sourced from Zurich Risk Room