Finland's growth pangs

Once a top European performer, Finland has posted some of the continent's worst economic data this year and, barring the emergence of a breakthrough industry, faces years of slow growth as its population ages.

Economists say the Nordic country's weak outlook stems from factors including the lack of a successor to the once-robust mobile phone sector; an ageing population; the slowing electronics, forestry and capital goods industries; and a relatively small services sector.

"With a rising industry to feed productivity like Nokia did in the past, things could look different, but at the moment there is no such field in sight," said Bank of Finland economist Timo Hirvonen.

The Organisation for Economic Co-operation and Development pointed to "significant labour market rigidities" in Finland, saying these would fuel rising unemployment.

"Forthcoming wage negotiations should align outcomes more closely to productivity within firms," it said.

Underlining the gloom, a survey from the Ministry of Employment and the Economy (TEM) on Thursday showed Finnish electronics and engineering firms expect only modest growth until 2011.