However, unstable markets in the rest of the world could still cause jitters in the Nordics, said the National Institute of Economic Research (NIER), as it presented its new forecast on Wednesday.
"We're seeing that it's going to keep chugging along this year and next. Sweden will enter a boom period [an extended period of growth] this year, in the second half of the year more exactly," NIER head forecast analyst Jesper Hansson told the TT newswire.
The agency estimated that Sweden would see GDP – one of the key indicators used to gauge the health of a nation's economy – grow by 3.5 percent over 2016. But in response to a global financial slowdown the figures were adjusted downwards from a predicted 3.9 percent in December.
"We then revise [the figures] for Sweden. Exports and investments are somewhat weaker in this prognosis," said Hansson.
The new forecast comes a month after number-crunching agency Statistics Sweden revealed that the Nordic country saw a whopping 4.5 percent GDP boost last year.
"It was expected that it would be strong, but it was still a bit stronger than most had expected," the chief economist of Scandinavian bank Swedbank Anna Breman said at the time.
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Meanwhile, inflation is expected to remain below target levels of two percent, suggesting that Sweden's central bank is likely to keep the interest rate at record-low levels.
Earlier this year, the Riksbank cut its key interest rate by 15 basis points to an all-time low of -0.5 percent, citing the risk of slowing inflation and falling confidence in its monetary policy.