The Chief Economist's blog: Support packages may bring United States to the top of the list of Finland’s export countries

Trillions in relief packages to boost the American economy

The U.S. economy may grow by over 7 percent this year and imports by well over 10 percent. The massive stimulus actions accelerate this growth. The recently approved $ 1.9 trillion relief package will increase the total amount of corona spending to $ 5.8 trillion. The support packages are huge, no matter from which angel you look at them. Americans will indeed receive new cheques, although they had amassed a few billion dollars of new savings after earlier cheques.

With the current trend the United States will become Finland's most important export country

The United States was Finland's second most important export country in 2020. Last year, services and goods worth EUR 10 billion were exported to the United States. In 2013, the value of exports was EUR 5.4 billion, making the United States Finland's fourth most important export country.

Last year, the difference between United States and our most important export country, Sweden, was just a few hundred million euros. If the current trend continues, the United States will surpass Sweden as our most important export country. It is true that last year, exports to the States was boosted by one major ship delivery, but the trend is clear.

Exceptional in this development is that although the value of all U.S. imports declined by more than 11 per cent in 2020, Finnish exports to the United States increased by more than 13 per cent. Even without the cruise ship delivery, there was growth. In other words, there was a clear positive development in exports despite the stagnation of the U.S. economy.

Service exports as a growth engine

What has been noticeable in this development is the strong growth of service exports. Seven years ago, these were worth EUR 1.6 billion, last year service export exceeded EUR 4.6 billion. Thus, we see a growth of over 180 percent. Service exports include such things as license payments, consulting services and computer services.

Export to the United States pave the way for Finland's future

Service exports have long been thought as the future sector of exports. The development of foreign trade towards the United States is an indication of these opportunities. In practice, the export of services is the export of know-how, where the workforce's level of education plays a key role. Therefore, Finland is well placed to grow its share. This development would bring a welcome diversification to our otherwise capital-driven export sector.