Press release from Ministry of Finance

Very serious situation for the global economy and the Swedish economy

Published

Minister for Finance Magdalena Andersson presents the new forecast from the Ministry of Finance today.

The virus outbreak has had a serious impact on economic growth, both in Sweden and around the world. This is a combined shock to supply and demand, with knock-on effects between countries.

The level of uncertainty in the forecast is very high. This assessment is based on analyses of how different sectors are affected by the measures taken to limit the spread of the virus and how the economy has reacted in previous crises.  

The global economy, like the Swedish economy, is expected to enter a recession with strongly negative GDP growth in 2020.

Swedish GDP is expected to drop by 4 per cent in 2020, which is on a level with the drop during the financial crisis. The negative growth rate and the considerable numbers reported so far of people who have been given notice of the termination of their contracts reinforce the expectation that the labour market will become significantly worse, with falling employment and rising unemployment. The employment rate is expected to fall clearly to just below 67 per cent, compared with 68.3 per cent in 2019, and unemployment is expected to rise to 9 per cent in 2020.

The recovery phase is expected to last for several years, with resource utilisation far below its normal level in the coming years.

The comprehensive fiscal policy measures and falling tax revenues are expected to result in large deficits in public finances. It is estimated that general government net lending will drop this year to -3.8 per cent of GDP. However, with a debt ratio at a historically low level Sweden has a stronger initial position than many other countries. 

Press contact

Johan Ekström
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 086 32 01
email to Johan Ekström
Mirjam Kontio
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 074 05 57
email to Mirjam Kontio
Karine Raoufinia
Head of the Macroeconomic Forecasting Division
Phone +46 8 405 96 21
email to Karine Raoufinia, via senior registry clerk
Thomas Bergman
Head of the Division for Public Finances
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk