As many as 16,000 jobs could be lost in Finland as a result of the planned incremental increases on Russian roundwood export duties, according to a scenario laid out by the Bank of Finland.
The alternative scenario, outlined in a memorandum published by the Bank, describes a situation where half of the roundwood supply currently imported to Finland from Russia is replaced by stocks from other countries and the domestic market.
This would lead to a 10% shortfall for the Finnish timber industry, reducing output by a similar amount and seeing GDP decline by 0.5% and 8,000 jobs lost.
However, if no replacement supplies are sourced, the impact of the rise in roundwood export duties could be twice as high, with the industry suffering a 20% decline and other areas of the Finnish economy suffering “due to the interlinkage between industries”.
“In this extreme scenario, GDP growth in Finland would slow down in 2008-2010 by approximately 1.4 percentage points cumulatively and employment would weaken by around 16, 000 persons employed relative to the baseline forecast,” said Dr Anssi Rantala, an economist with the Bank of Finland.
The scenario is part of a full forecast scheduled to be published by the Bank of Finland in November.
