Press release from Ministry of Finance

Sweden well equipped for economic slowdown

Published

Minister for Finance Magdalena Andersson today presented the Ministry of Finance’s latest economic forecast and the focus of the budget during the Government’s discussions at Harpsund.

“For some time now, we have been saying that we see an economic slowdown ahead. It’s clearer now that we are entering this phase. The risks have increased. At the same time, resource utilisation remains higher than normal and the responsible fiscal policy we have pursued over the past few years has created scope to handle this slowdown. Sweden is well equipped,” say Ms Andersson.

The economic situation in Sweden has improved in recent years and growth has been high. Resource utilisation in the Swedish economy is currently assessed as being higher than normal, i.e. the Swedish economy is still producing above its long-term capacity. However, the economy slowed during the first half of 2019. The international economic downturn is now having a clearer impact on Sweden. 

The risks of weaker growth increased during the summer due to events around the world. The trade conflict between the US and China has escalated, and the risk of the UK leaving the EU without an agreement has increased. The circumstances surrounding the withdrawal are currently very uncertain. Political tensions in the Persian Gulf have increased.  

The unemployment forecast remains unchanged since the Spring Fiscal Policy Bill, and labour force participation and the employment rate are expected to remain at record levels. This year, the proportion of people who are dependent on sickness insurance, unemployment insurance, introduction benefit or income support is the lowest since 1981.

Sweden’s public finances are strong. Today, the central government debt-to-GDP ratio in Sweden is the lowest since 1977, and public debt is low in an international perspective. Next year, the structural balance is estimated to amount to 0.2 per cent of GDP.

“To start pursuing a forcefully austere fiscal policy in this situation would not mean a balanced fiscal policy. In addition, Sweden is facing a number of social problems that we can only solve by building a stronger society. In the coming budget, the Government will therefore give priority to measures that help get more people into work, strengthen our welfare system, improve pensioners’ finances, and improve the environment and produce climate adaptation that is fair and ambitious. We will also increase resources to safety and security, which has broad support in Swedish politics,” Ms Andersson concludes.

Contact

Isabel Lundin
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 762 96 46 38
email to Isabel Lundin
Per Strängberg
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Thomas Bergman
Head of the Macroeconomic Forecasting Division
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk
Thomas G Pettersson
Head of the Public Finances Division
Phone + 46 73 985 08 37
email to Thomas G Pettersson, via senior registry clerk