The Social Democrats’ losses were the conservative Moderate Party’s gains, as main opposition party regained their position as Sweden’s largest party with 25.6 percent in the latest poll.
The Social Democrats, led by Prime Minister Stefan Löfven, and their Green coalition partners, as well as the Left Party, have 37.2 percent, compared to 42.8 percent for the four centre-right Alliance parties of the former government.
The poll also shows the opposition Christian Democrats nudging just above the 4 percent threshold necessary for representation in parliament.
However, the steady gains by the anti-immigration nationalist Sweden Democrats seem to have come to a halt, with their rating dipping slightly to 18.2 percent.
Analysts say the shifts in the poll likely reflect the problems the ruling parties are having dealing with the recent major increase in refugees.
The poll was conducted at the same time as the controversy surrounding Foreign Minister, Margot Wallström’s Stockholm apartment was its height, something which may also have adversely affected the Social Democrats’ rating.
In an email to the Swedish news agency, TT, the Social Democrats' party secretary, Carin Jämtin, responded to the poll by saying, "We have had a challenging year and this poll figure reflects the fact that Sweden faces several challenges that we must deal with.”
“In order to turn public opinion in 2016 we must continue to manage the issue of migration and make it a priority to protect welfare so people feel secure and continue the fight against unemployment so that more are involved in working and contributing to our society."
The Moderates’ success was due to their leading the migration debate, political scientist Jonas Hinnfors told Svenska Dagbladet.
Meanwhile, the party secretary of the Moderates, Tomas Tobé, said, “Anna Kinberg Batra (the Moderates’ leader) has proposed order in the economy, a temporary refugee break and more jobs. These are policies that more and more voters support.”
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The political landscape in Sweden has been dominated by the refugee crisis over the past two years.
Sweden has recently taken in more asylum seekers per capita than any other EU nation -- 160,000 asylum requests last year, including 26,000 unaccompanied minors, with 115,000 of them in the last four months.