Sweden hikes growth forecast for 2012

Sweden's finance ministry on Wednesday raised its growth forecast for 2012 but said the economy would grow slower than previously expected next year due to the deepening European debt crisis.

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"Growth and employment developed fairly strongly during the beginning of 2012, which means the prognosis for the full year has been revised up somewhat but it is still low in a historic context," the ministry said in a statement.

It revised the 2012 figure up to 1.1 percent from the 0.4 percent given in April, although the forecast up until then was 1.3 percent.

Speaking at a press conference in Visby on the Baltic island of Gotland, finance minister Anders Borg said the forecast had "quite cautious upward adjustments".

For next year, the ministry trimmed its forecast from 3.3 percent to 3.0 percent.

It stood by its unemployment forecast from April, which has the Swedish jobless rate rising to 7.8 percent this year from 7.5 percent in 2011.

Uncertainty in Europe, "where the downward trend is obviously dominant, entails a continued need for good security margins to continue to ensure Sweden's ability to meet a dramatically worse course," Finance Minister Anders Borg said in the statement.

"Sweden will continue to stand steady despite a stormy surrounding world," he added.

Speaking to reporters, however, Borg hinted that Sweden was ready to take action should economic conditions deteriorate.

"If the situations worsens, we can implement labour market policy reform measures and stimuli," Borg told reporters in Visby.

AFP/TT/The Local
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