The King, who recently celebrated 40 years on the throne, was eager to pay tribute to the Swedish nation for their role in a year most notable for the state visit by US President Barack Obama.
"We are a small country on earth but together we are able to create great things. Swedes are distinguished as hard working, considerate and curious," he said on Sveriges Television (SVT).
He referred to achievements made by the Royal Institute of Technology (KTH) in Stockholm as having raised Sweden's profile internationally.
Barack Obama visited the KTH in September and was told about Sweden's pioneering work in the renewable energy sector which the King also mentioned.
The year was also notable for the royal wedding of his daughter Princess Madeleine while the King travelled extensively where he said he was warmly received by locals across the country.
"These meetings have made it easy to understand why the rest of the world turns and looks so often towards our Sweden. This country high in the north which so often raises great interest.
He added; "It has been a privilege for me to represent Sweden as it has been in the 40 years I have been King...I want to say a big thanks to everyone around Sweden who have made this a year I will remember for a long time," said the 67-year-old.
The King concluded his speech by saying he was hoping that Sweden's history of peace and freedom would continue and that it would be shared with the rest of the world.
A recent poll suggested that Swedes felt it was time for King Carl XVI Gustaf to step down in order for his daughter Victoria to reign. The King has so far not declared any intentions to abdicate.