IMF praises Sweden for handling of crisis
Published: 7 Jun 10 13:05 CET | Print version
Online: http://www.thelocal.se/27080/20100607/
The International Monetary Fund (IMF) has praised both Sweden's central bank, the Riksbank, and the Swedish government for their handling of the economic crisis.
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The uncertainty regarding Swedish growth has increased in step with the debt crisis in Europe that gained momentum in the spring, according to the IMF.
Peter Doyle, who led the annual review of Sweden's economy, sprinkled praise on the Riksbank and the government for their handling of the crisis.
He could not think of anything that could have been done better.
"I believe that the answer is no, despite there having been a huge economic shock," Doyle said in a statement. "The government has allowed the budget surplus to turn into a deficit in order to keep demand up and the Riksbank has kept interest rates down."
The IMF also welcomed the Financial Supervisory Authority's (Finansinspektionen) proposal to place a cap on mortgages at 85 percent of the market value of the dwelling to be purchased. According to the IMF, this ceiling can act as insurance against undesirable consequences from excessive lending to home buyers.
The IMF noted that Sweden's GDP fell by 5 percent last year while unemployment rose to over 9 percent and the financial strength of the export industry deteriorated.
At the same time, Doyle thinks that the current turmoil in Europe is hard to judge. He feels that the Riksbank should take into account these concerns at the next interest rate meeting.
"It's hard for anyone to assess what the worries involve, but it is definitely something one should consider," he said. "However, it is possible that the situation will be clearer in July. We think the Riksbank's interest rate path is otherwise a reasonable path on the basis of developments in Sweden."
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Sweden can continue going from strength to strength as long as this progress is allowed to continue. Lower taxes create greater tax receipts and control of your own currency allows you to react independently to economic situations.
Exactly correct. Sweden learned the first time.
In effect money flows into the country through exports and then is circulated rapidly and continuously at almost 80% levels through fiscal stimulus.
It is the envy of the world and works flawlessly because the Swedish population don't mind working their guts out all day and then handing 80% of their pay cheque back over to the government for their troubles. It's a win win!
If Astrid Lindgren could be taxed 102% of her earnings you get my point.
If you take into account, Income tax, House Tax, Council tax, Bin tax, Road Tax & Cumulative MOMS, you will probably find the amount the average swede is taxed to be in the region of about 70 to 80%
Woking their guts out... okay, so Compared to the UK, swedes get off pretty lightly, but at the end of the day, swedes work to pay taxes and little else. This is the Scandinavian model.
It has been forcing these countries to carry deflationary policy, which contracted their economies and increased unemployment. It was powerfull because US and Europe demand that developing countries that are seeking foreign assistance should implement IMF recomendations and reck their economy before they are legible for loan or assistance.