Sweden: Economic upswing to continue next year

Finance Minister Magdalena Andersson
Photo: Kristian Pohl/Government Offices of Sweden

Sweden’s Finance Ministry today presented the latest forecast of the country’s economy and public finances. The employment rate and labor force participation have been revised upwards and growth continues to gain strength.

“Our GDP forecast for this year remains unchanged. For next year, we have revised the forecast for growth slightly upwards, mainly because global growth is expected to be stronger, which will benefit Swedish exports,” noted Minister for Finance Magdalena Andersson.  

Ms. Andersson also provided an analysis of the Swedish housing market. Prices have been dampened in the past three months, partially due to an increase in supply. It is difficult to predict how extensive the decline will be.

There are, however, some underlying factors that indicate a robust increase in demand, such as high consumer confidence, stable income growth and the fact that there is still a large housing shortage, especially in certain segments.

The GDP forecast for 2017 remains unchanged. On the other hand, last year’s GDP has proved to be stronger than in the previous forecasts, which means a decrease in the difference between the years.

For next year, the GDP level has been revised upwards. Growth is broad-based, with household consumption, investments and exports continuing to increase steadily. Next year, the forecast for exports in particular has been revised upwards, due to a stronger international situation.

Unemployment is expected to fall to 6.1 per cent next year, while the employment rate and labour force participation have been revised upwards for everyone in 2018–2020.

“We have not seen such a large proportion of employed people aged
20–64 since 1992. At the same time, we see that next year, the proportion of people dependent on unemployment insurance, introduction benefits or other support is expected to be the lowest since 1981,” Minister Andersson said.

Since the Budget Bill was presented, the forecast for net lending is virtually unchanged and remains at 1 per cent of GDP for the next few years.

The trend towards increasing income gaps appears to have been broken, and the forecast for next year suggests that in Sweden the gaps will decrease, which is a result of the policies pursued by the government.

 

Source: Swedish Government

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