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Press release from Ministry of Finance

IMF review of the economic situation in Sweden completed

Published

A team from the International Monetary Fund (IMF) visited Sweden in autumn 2016 to conduct its annual review, or Article IV consultation, of the economic situation in Sweden and has now published its results. A complete report will be discussed by the IMF board in November 2016 and subsequently published.

The IMF has analysed a number of areas. They conclude that Sweden is enjoying strong growth, aided by supportive monetary and fiscal policies. Employment has risen by 1.5 per cent so far in 2016, pushing unemployment down to about 7 percent. Domestic demand is the key driver of growth.

The IMF considers appropriate the way the Government is accommodating the migration-related costs, and the budget deficit is still expected to be small owing to robust revenues and also due to lower than expected spending in other areas, so the fiscal stance is broadly neutral. The IMF team welcomes the reforms in the Budget Bill for 2017, stating that "while preserving a small fiscal deficit in 2017, the budget provides for initiatives totaling 0.6 percent of GDP in education, child and elder care, and active labor market policies, among others". At the same time, the team points out that continued improvements of the reception and integration system will be crucial going forward.

The IMF also welcomes the changes being made to the fiscal policy framework, involving a reduction of the surplus target from 1 per cent to 0.33 per cent of GDP and the introduction of a debt anchor.

"It is very positive that there is clear international support that the Government's pursued fiscal policy is well considered. The IMF also welcomes the investments we are making, including in education as well as child and elderly care, while at the same time we have a tight grip on public finances," says Minister for Finance Magdalena Andersson, who also observed that the team had taken note of the fiscal policy framework agreement.

The IMF also stresses that continued sustainable growth requires measures against risks, such as on the housing market. In the area of financial markets, risks linked to a large and international banking system were also emphasised.

"The Government generally agrees with the risks that were highlighted and this is reflected in our ongoing efforts. In the financial markets area, which is in particular focus, the Riksdag has called for an inquiry on the Riksbank that will be launched in the coming months. We are analysing alternatives to clarify the mandate of Finansinspektionen (the Swedish Financial Supervisory Authority) for macroprudential policy, and there are several international initiatives in the capital and liquidity area," says Minister for Financial Markets Per Bolund.

Press contact

Fredrik Kornebäck
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Miriam Abu Eid
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Anna Söderström
Press Secretary to Minister for Financial Markets and Consumer Affairs Per Bolund
Phone (switchboard) +46 8 405 10 00