Finland stuck in doom loop with highest jobless rate in decades

HELSINKI – Unemployment in Finland soared to the highest level seen this century as the economy remains stuck in a self-reinforcing negative cycle.

The jobless rate, adjusted to eliminate seasonal variation, rose to 10.6 per cent in November from 8.9 per cent a year earlier, data from Statistics Finland showed on Dec 23.

“A vicious cycle of unemployment and weak confidence continues to drag on economic recovery in Finland,” Mr Petri Malinen, chief economist at the Federation of Finnish Enterprises, said in a note.

“High unemployment weakens consumer confidence, which reduces the growth of private spending. And weak private spending slows down recovery in the job market.”

The data adds to a grim picture for the northernmost member of the euro area
, which has been Europe’s worst-performing economy since 2020.

Finland has been hurt by weak demand in Europe – most notably in its key export market, Germany – as well as sanctions against neighbouring Russia.

In November, bankruptcies reached the highest level in almost three decades, led by builders.

The headline unemployment rate rose to 9.7 per cent in November from 9.6 per cent in the previous month, the highest since June.

“The jobless rate is clearly at a higher level than at any time in the 2000s,” said Mr Jukka Appelqvist, chief economist at the Central Chamber of Commerce. 

“We must remember that unemployment reacts to economic shifts with a delay,” he said. “That’s why unemployment is often at its highest when the economic cycle is already headed in a better direction.” BLOOMBERG