Sweden: Strong economic growth expected
Swedish Finance Minister Magdalena Andersson
The Swedish economy is in recovery, with growth this year and next expected to be considerably stronger than previously foreseen. GDP growth in 2015 will reach 3.6 per cent, which is the highest growth rate for more than four years. This is the message from Minister for Finance Magdalena Andersson, presenting the Ministry of Finance’s latest forecast for the economy and public finances on Monday.
“The forecast shows a strong Swedish economy, with consumption and investments contributing substantially to growth this year and in the coming years,” says Ms Andersson.
Unemployment is expected to continue to decline. The forecast shows employment continuing to grow relatively rapidly in the next two years and unemployment falling to 6.5 per cent in 2017.
However, some of the assessments in the forecast are uncertain. These largely have to do with assumptions concerning the refugee situation. The number of people arriving in Sweden, and the capacity of the public sector to recruit labour, may not develop as expected. In addition, there are considerable risks in the world around us.
The forecast shows stronger public finances next year than assumed in the Budget Bill. Although expenditure is expected to be higher, tax revenues are expected to contribute to net lending being nearly SEK 3 billion greater in 2016. This is due partly to surprisingly large outcomes for tax revenues and partly to the expectation that the stronger forecast will generate higher tax revenues in future.
“In just one year we have halved the deficits in the public finances that we inherited, by conducting a responsible economic policy. We will reduce the deficit further in the future,” Ms Andersson says.
“In the situation we find ourselves in, with an unusually large number of people seeking asylum in Sweden this year, we have also taken measures that enable us to avoid hitting the expenditure ceiling next year. The framework of expenditure ceilings and targets for net lending must be complied with while still safeguarding welfare,” says Ms Andersson.
Swedish Government
