COVID-19 leads to public finance deficit in Norden

The economy contracted strongly in all Nordic countries when the corona pandemic started in spring 2020, according to Statistics Finland.

As income fell and expenditure grew, public finance fell into deficit in all Nordic countries in 2020.

The countries’ different initial situation can be seen in the recovery of public finance.

In 2021, the public finance of Norway and Denmark went back to surplus, that of Sweden was stabilised and Finland's deficit contracted to minus 2.6 per cent.

Tourism has been one of the industries hit most by the pandemic. In April 2020, the number of nights spent by tourists in the Nordic countries went down by 67 to 94 per cent from the pre-pandemic period.

The fairly fast recovery of domestic tourism has supported tourism industries and partly closed the gap left by foreign tourists.

Among the Nordic countries, tourism is of the most importance to the economy of Iceland. The recovery of tourism in Iceland has been slowest in the Nordic countries.

After the initial shock, business activity recovered rapidly, with the exception of tourism, restaurant and event sectors.

The survival of enterprises and households was supported largely with public funding in all Nordic countries.

Except for Iceland, gross domestic product had returned to pre-pandemic levels in all Nordic countries in the last quarter of 2021.