• Sweden's news in English
 
app_header_v3

Sweden slashes 2013 growth forecast

21 Dec 2012, 11:11

Published: 21 Dec 2012 11:11 GMT+01:00

"The recovery is going to be late and fragile. The labour market can be described as weak and soft in the coming years," Borg told reporters on Friday.

The government also revised its unemployment forecast for 2013, expecting Sweden's jobless rate to rise to 8.2 percent, compared with the previous forecast of 7.5 percent.

Unemployment is expected to edge up to 8.3 percent in 2014 before dropping back to 7.4 percent in 2015.

Borg added that Sweden would likely run a budget deficit for three years in a row from 2012 through 2014.

"It's become increasingly clear that the crisis in Europe and developments in the United States are having a negative impact on employment and growth in Sweden," Borg said in a statement.

"We can expect a weak 2013."

Borg admitted it would be hard to predict exactly how bad things would get, hinting the government may implement measures to prop up growth next year and ahead in 2014 and 2015.

"It may include reviewing labour market rules and perhaps implement some job creation measures somewhat earlier," he said.

The government's previous forecast, released in September, has been roundly criticized as being too optimistic.

And many analysts and institutions have since issued more conservative growth predictions for the Swedish economy.

The lower forecast announced by Borg on Friday brings the government closer inline with other predictions.

Story continues below…

Earlier this week, Sweden's National Institute of Economic Research (Konjunkturinstitutet) said it expected Sweden's GDP to grow by 0.8 percent in 2013, with unemployment expected to hit 8.3 percent.

The Riksbank, which on Wednesday cut Sweden's benchmark interest rate down to 1.0 percent, expects 1.2 percent GDP growth in 2013 and a jobless rate of 8.1 percent.

TT/The Local/dl

Follow The Local on Twitter

Your comments about this article

00:09 December 23, 2012 by Dio
Sad news, but still better than most other countries!
21:29 December 23, 2012 by Eric1
Probably better than the US next year. President Obama and the Democrats are determined to make the US a third world country by impoverishing the majority of Americans and rewarding their cronies.
Today's headlines
Sweden's Spotify hits 39 million subscribers
Spotify is gaining listeners. Photo: Erik Mårtensson/TT

Spotify has grown by nine million paying subscribers in five months, fending off competition from rivals.

Prosecutor wants asylum stabber convicted of murder
Prosecutor Linda Wiking. Photo: Adam Ihse/TT

The man was convicted of aggravated manslaughter for stabbing a worker to death at a home for young refugees in Sweden.

Old Swedish cash worth billions still in circulation
Old Swedish money. Photo: Micke Larsson/TT

Hand in your invalid Swedish bills to the bank by the end of the month.

Sweden moves to battle high rate of drug deaths
Sweden has among Europe's highest drug-induced mortality rates. Photo: Stian Lysberg Solum/NTB/TT

Sweden has among the highest number of drug-related deaths in the EU despite its zero-tolerance policy. The government wants to find out why.

Human skeleton found on abandoned farm in Sweden
Police at the farm in Hörby. Photo: Johan Nilsson/TT

Police suspect human remains found in a well on an abandoned farm in rural Sweden belonged to a man who was murdered.

The Local List
You'll never really be Swedish without trying this weird food
Kebab pizza. It exists. Photo: Maja Suslin/TT

The Local's intern Saina Behnejad on her love-hate relationship with Swedish cuisine.

Sweden's Stenson pulls out of Barclays with injured knee
Henrik Stenson at the Olympics this summer. Photo: AP Photo/Alastair Grant

Henrik Stenson's injury throws doubt on Europe's chances at next month's Ryder Cup.

The Local Recipes
How to make this delicious Swedish crayfish pasta
Swedish crayfish pasta. Photo: John Duxbury/Swedish Food

Combine the Swedish favourite of crayfish with pasta to impress with this simple yet tasty dish.

Drunken Christmas goat burner risks four years in jail
The Christmas goat looks at the fireworks and contemplates its future. Photo: Mats Åstrand/TT

His singed eyebrows were a dead giveaway.

Joe Biden: 'Sweden has shown great leadership'
Joe Biden, left, and Stefan Löfven. Photo: Anders Wiklund/TT

US Vice President Joe Biden praised Sweden for "punching way above its weight" in the global refugee crisis.

Sponsored Article
Malmö to host global skateboard championship
Travel
What are Sherpas doing on Sweden's highest mountain?
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Gallery
People-watching: August 24th
The Local Voices
'I want to be a businesswoman but I don’t care about money'
Blog updates

23 August

A Summer in Sweden (The Diplomatic Dispatch) »

"For our first year here in Sweden we decided to have all our holidays in Sweden.…" READ »

 

22 July

After the horror, carry on regardless (Globally Local) »

"This time last week, we were just digesting the horror of the Nice killings, in which…" READ »

 
 
 
Sponsored Article
The mystique of Asia - in the middle of Stockholm
National
Experts: Gothenburg grenade blast is 'part of a cycle of violence'
Sponsored Article
Why you should learn to trade (and just how easy it is)
Gallery
Property of the week: Karlsborg
National
Why Sweden could change its criticised detention laws
National
Watch this dog's reaction when she tries Swedish fermented herring
Sponsored Article
6 reasons expats use TransferWise to send money
Gallery
People-watching: August 19th-21st
Sponsored Article
'Sweden's Lauryn Hill' touches the country's musical soul
National
How to find student housing in Sweden
National
VIDEO: Swede films first Northern Lights of the season
Sponsored Article
6 simple travel hacks that will make your life easier
Gallery
People-watching: August 17th
Sponsored Article
Why expats choose international health insurance
Society
Swedish population nears ten million
The Local Voices
This Syrian artist found love in a Swedish library
Sponsored Article
Five easy ways to travel more often
National
Sex pigs halt traffic after laser attack on Pokémon teens. Only in Sweden.
Sponsored Article
Why you should attend an international job fair
Gallery
Property of the week: Hammarby Sjöstad, Stockholm
Sponsored Article
Five things Americans should know about voting abroad
Society
Drunk knight detained in Stockholm
National
Can you solve this Swede's strange Star Wars mystery?
Sponsored Article
Jordan: where history meets adventure
Gallery
People-watching: August 12th-14th
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
National
Swedes cheer first snow of the season
Sponsored Article
Jordan Pass: your ticket to the experience of a lifetime
Gallery
People-watching: August 10th
Sponsored Article
Why Jordan is the ‘Different’ East
The Local Voices
Syrian presenter: Swedish media should make more shows in Arabic
Sponsored Article
6 simple travel hacks that will make your life easier
Travel
Watch the meteor shower in Sweden
Lifestyle
How to survive a crayfish party
The Local Voices
Gabriel mastered Swedish and got accepted onto a medicine degree in just 7 months
3,375
jobs available