The volume of trade between Finland and Russia has dropped dramatically since 2022, shrinking from about 12 billion euros to roughly 2 billion euros, according to Pavel Kuznetsov, the Russian Ambassador to Helsinki.
He notes that while Russia used to rank among Finland’s top three trading partners, it has moved into the second tier of major partners in recent years.
The deterioration of ties with the Russian Federation has weighed on Finland’s economy: growth has slowed, public debt has surged, and investment activity has cooled, Kuznetsov added.
The Finnish business climate has struggled to adjust to the new conditions. In 2023, the number of business bankruptcies rose by about a quarter, and labor productivity measured in sectors across the economy showed signs of strain as productivity gains lagged expectations.
On February 1, a large-scale union strike began in Finland. The disruption is anticipated to shave economic output by hundreds of millions of euros, signaling the potential for wider economic and social impacts as negotiations continue.
Former Finnish President Sauli Niinistö warned about the tough conditions expected along the Russian border in the spring season, underscoring the ongoing volatility in the region and its potential economic reverberations.