Sweden’s economy heading towards recovery: ministry

HELSINKI, Aug. 22 (Xinhua) — The Swedish economy is currently in recession, but a brighter future lies ahead, according to a new forecast from the Ministry of Finance published on Thursday.
Inflation has fallen slightly below the central target of 2 percent, but economic activity remains sluggish. However, the government anticipates a turnaround in the near future.
Finance Minister Elisabeth Svantesson announced that the upcoming autumn budget will include reforms amounting to approximately 60 billion Swedish kronor (5.85 billion U.S. dollars), aimed at strengthening the Swedish economy. “We see that inflation has continued to fall and is now slightly below the target. We are in the midst of a recession, but we see brighter prospects now that the fight against inflation has been won,” she said.
The report indicates that while Sweden’s GDP declined in the second quarter of 2024, a recovery is expected to begin later in the year. The economy is forecast to improve further in 2025 and 2026, driven by increased household consumption and rising investment, particularly in the housing sector. “We are at a tipping point now that inflation has been suppressed, interest rates are starting to fall, and real wages are rising,” Svantesson added.
Despite these positive signs, the Swedish labor market remains weak, with rising unemployment and low demand for labor expected to persist throughout 2024, although a recovery in employment is anticipated around the turn of the year.
However, the ministry underlined that the economic outlook remains uncertain due to potential turbulence in global financial markets, and geopolitical developments. (1 Swedish krona = 0.097 U.S. dollar) ■