Finland’s jobless rate rises to highest level in over two decades

Finland’s unemployment rate has climbed to its highest level this century, underscoring the country’s prolonged economic downturn and what economists describe as a self-perpetuating negative cycle.

According to Bloomberg, seasonally adjusted data published by Statistics Finland on December 23 showed the unemployment rate rising to 10.6 per cent in November, up sharply from 8.9 per cent in the same month a year earlier.

Petri Malinen, chief economist at the Federation of Finnish Enterprises, said the figures point to a damaging feedback loop weighing on the recovery. In a note, he warned that high unemployment continues to erode consumer confidence, which in turn restrains growth in private spending. Weak consumption then slows any improvement in the labour market, prolonging the downturn.

The latest data adds to an already bleak outlook for the euro area’s northernmost economy, which has been Europe’s worst-performing country since 2020. Finland has been hit by subdued demand across Europe, particularly in its key export market of Germany, as well as by the economic fallout from sanctions imposed on neighbouring Russia.

Signs of stress across the economy have also intensified. In November, the number of bankruptcies climbed to the highest level in nearly 30 years, with construction companies accounting for a significant share of the failures.

The unadjusted, or headline, unemployment rate edged up to 9.7 per cent in November from 9.6 per cent in October, marking the highest level since June.

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

At the same time, Appelqvist cautioned that labour market data often lags broader economic trends. He noted that unemployment typically peaks after an economic downturn has already begun to ease, meaning joblessness can remain elevated even as the wider economic cycle shows early signs of improvement.

By Tamilla Hasanova