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Sweden slashes 2011 growth forecast

Sweden slashes 2011 growth forecast

Published: 26 Aug 2011 15:41 GMT+02:00
Updated: 26 Aug 2011 15:41 GMT+02:00

Sweden's finance ministry Anders Borg on Friday announced that the government had significantly lowered its growth forecast for 2011.

Speaking at the government's budget talks in Harpsund, Borg said that the government now expects the economy to expand by 1.3 percent instead of the 3.8 percent it estimated in April.

"There is great uncertainty going forward and the risk of a weaker development is predominant," Borg said.

Borg had already cautioned earlier this month that Sweden would need to "significantly" revise down its growth expectations for 2012 amid the rekindled global financial crisis.

"The great uncertainty when it comes to developments places heavy demands on having clear safety margins to secure that Sweden has the freedom of movement it needs to meet a longer and deeper downturn," Borg told reporters in Harpsund, in central Sweden, Friday.

"By making sure the financial savings are near even in the year to come we will ensure satisfying margins," he added.

The finance ministry explained in its statement that Sweden, "as a small and export-dependent economy with a large financial sector, is affected by the increased unease on the finance markets and by the weakening global economy."

It said Sweden was now expected to have "near-balance" of 0.1 percent surplus in its 2012 budget, down from its April forecast that it would post a 1.8-percent surplus next year.

AFP/The Local (news@thelocal.se)

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17:26 August 26, 2011 by Great Scott
Published: 26 Apr 12 15:41 CET

Sweden's finance minister Anders Borg on Friday announced that the government had significantly lowered its growth forecast for 2012.

Speaking at the government's budget talks, Borg said that the government now expects the economy to be in recession instead of the 1.3 percent it estimated in Aug 2011.

Incompetent fool.
17:34 August 26, 2011 by RobinHood
"Borg said that the government now expects the economy to be in recession ..."

Er, do you intend to correct the above misquotation Great Scott, or do you want us all to think that you are a liar?
18:18 August 26, 2011 by ReluctantSwede
@RobinHood, you have to excuse @GreatScott, he is probably just an indoctrinated Socialdemokrat fool reacting without thinking as they do....but it is of course not his fault, he can just blame someone as so many other of them do....no need for critical thinking and personal responsibility...
18:36 August 26, 2011 by conboy
"export dependent country with a large financial sector" I come from one of them - I think what he is saying is that we are all goosed but until after the election he won't be saying it straight out. Now wait a minute what does this remind me of? All those empty appartment buildings in Estonia, Latvia, Lithuania, and of course the Ukraine not to mention the properties Swedish banks own in Spain, the UK, and Ireland hence Swedish participation in the Irish bank bailout. Be afraid people be very afraid SE Banken and Swede Bank have avoided Swedish bank regulations by over extending credit to an unsustainable property boom in countries that will take at least a decade to recover again.
18:40 August 26, 2011 by The Grand Master
Assuming the combined egos of the idiots who are 'running' the Eurozone and the hopelessly aimless US administration can learn some basic economics for dummies, Sweden will not get dragged too far into this pit of incompetence.

Without doubt the Swedish Government is pursuing the correct policies- eliminating excessive state spending (and the resulting deficit/long term debt) combined with strong policies for growth.

Sweden will inevitably suffer from this world downturn, but the foundations here are extremely solid. Expect a strong rebound by 2013, (if Merkel and Sarkozy haven't devastated every Euro economy by then with their stubborn moronic obsession with an unworkable monetary union-proving right wing governments can be crap as well).

What the hell the Swedish left would do if in power now doesn't even bare thinking about! Spend spend spend on increased welfare and benefits to discourage work and enterprise and we'd be on the road to ruin.

Most western governments are looking at Sweden as a template for running a strong successful modern economy-every mention of Sweden in the international press is just oozing with envy.
21:33 August 26, 2011 by Mib
@ Grand Master Well said! Some people moan about anything and everything while contemplating their naval and planning whether to have a biscuit or eat the cake they bought the day before.

Sweden is in a much stronger position than most countries in the world. The banks didn't need bailing out and the country was one of the first out of recession. Due to its size, it is affected greatly by a downtown abroad as it's an export driven economy. We do not have severe austerity measures here. We do not have riots across the country. We do not have mass protests in the main cities.

These same people should move abroad if its so bad. That's what the Irish did in the past and are doing now.
21:38 August 26, 2011 by conboy
The Swedish Navy are not the problem Mib
22:26 August 26, 2011 by the fonz
Don't you just adore the dooms dayers ?

Sweden is in incredibly good shape in comparison to all of Europe and we still have these 'headbangers' who see nothing but negativity in everything.

I wonder what it's like in their negative world. I am beginning to think that even when I'm feeling a little down - I'm still happier than this bunch.

Come on guys - judge on results - not your biased ideoligies - Borg and co have done an great job so credit where credit is due.
12:53 August 27, 2011 by Frank Arbach
I read on business website that reported Swedish unemployment figures were expected to rise to 7.9% by 2012.

Come to Sweden and find a job anyone?
13:21 August 27, 2011 by conboy
Work is drying up in Stockholm only silver spoon merchants and protected interests want this government to remain in power as for the social democrats I would not worry to much about them apart from giving their buddies jobs in the public services and pork belly investments in social democrat voting areas they will pursue moderate inspired politics in the main. More of the same helt enkelt!
14:33 August 27, 2011 by McChatter
Of course Sweden is in good financial shape! Borg has been doing what all prudent households do, saving his surplus cash instead of spending it. Look at the price of Swedish state bonds - the cheapest is 106 in this time of crisis. Sweden is in a good position to survive a downturn in the world.

@Conboy Are you by any chance Tommy Waidelich in disguise? LOL!
14:59 August 27, 2011 by conboy
Nah buddy don't hang my hat on anyones hook but I will tell you one thing state sponsored market capitalism has not proved to be a better alternative globally than state sponsored state communism my dilemna is in trying to concieve of some better alternatives and in the market place of ideas I find only idiots and bigots peddling their SHyte while people are still starving in the world by the way @McChatter are you Jimmy Åkesson in disguise?
14:28 August 29, 2011 by Brucelee@stockholm.sweden
what about already hiked interests rates, morons in central bank (Riksbank) already did that, based on previous estimation.
19:25 August 29, 2011 by Great Scott
Well I am back after a long weekend to find that the clueless right wing geeks have taken the bait. These short sighted selfish naive fools have failed to see through the likes of borg and co. Since these morons gained power Sweden has been in gradual decline, at the cost to honest working and unemployed people. The only people to benefit from this incompetent regime are the already better off. Sweden's unemployment has continued to rise and is close to being amongst the highest in Europe (under 25's already the amongst highest). The Swedish government continues to lie about the levels of unemployment, by saying that the unemployed that work for free (Phase 3) are employed. The number of phase 3 workers are increasing every month and so are the government lies. Sweden's welfare state once the envy of the world is also in decline, with once again the only people benefiting being the well off. In 100 years from being a poor country Sweden's working class took control from the thieving rich and built a respectable nation. The current right wing morons fooled the people with promises, sadly none have happened. The government is now relying on lies to maintain its grip on power, thankfully the people are beginning to see through and slowly are returning to the politics that made Sweden great. The question now is, can the damaged caused by these right wing morons be reversed. Sweden is becoming a divided nation once again, rich and poor and the gap is growing at an alarming rate. I am now waiting to see how it will deal with the 15,000 employed at Saab one way or another, if it fails (hopefully not). Of course I do expect a response to this, and if you do please say what category you come under, rich or just plain naive.
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