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Swedish economy in sharp upswing

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20:48 CEST+02:00
The Swedish economy is in a sharp upswing, with industry operating at high capacity utilisation during the second quarter and net exports hitting a record high of nearly 62 billion crowns, according to DI, citing new figures from Sweden Statistics (SCB).

"The upswing now is considerably broader and is spread among several sectors," said SCB chief analyst Lena Hagman, noting that last year only the automotive and pharmaceutical sectors performed well.

The economy grew by 3.6 per cent in Q2 year on year, with net exports contributing most to the expansion, with 2.8 per cent.

But while DI was upbeat about the SCB figures, SvD and DN had a more cautious interpretation, reporting that the Swedish export industry was losing momentum. DN and SvD wrote that Swedish industries received far fewer orders in August. But while the rise in exports has begun to lose speed, domestic demand for industrial goods has increased, the papers wrote.

Stronger krona expected in 2005

The Swedish krona is expected to strengthen against the dollar and the pound next year, according to Föreningssparbanken which, at the same time, warns that the closure of Barsebäck could entail risks for the krona's value.

Sweden's large current account surplus is one reason behind the forecast of a strengthening krona. The country's relative growth vis-à-vis the global economy is also seen as another positive factor for the Swedish currency.

However, the bank cautions that future company investments hinge on the price of oil. Thus an escalating and unstable oil price could dampen the krona's strength.

SAS warns of further cutbacks, closures

SAS management plans to phase out or sell parts of its Swedish ground services, which employs 2,500 workers at 16 airports.

The new wage deal with 950 members of the Transport Workers Union has turned out to be too costly, according to SAS. Members of the transport union were also not entirely pleased with the wage deal, with some worried the agreement could cost them their jobs.

This developed as SAS faces declining passenger traffic and rising fuel prices, reports DI.

Sweden depends on nine corporate giants

Ericsson, Volvo Cars, AB Volvo, AstraZeneca, Saab Automobile, ABB, Stora Enso, Outokumpu and Sandvik comprise the nine major companies that are sustaining the Swedish economy, said DI this week, noting that these companies account for nearly half of Swedish exports. Exports, in turn, account for 45 per cent of GDP.

Sources: Dagens Nyheter, Svenska Dagbladet, Dagens Industri

Supplied by BECK TRANSLATIONS.

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