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ECONOMY

Strong Swedish growth during the autumn

Statistics Sweden reported that GDP rose by 3.8 per cent year-on-year, but the figures should be taken with a grain of salt, according to Sven-Arne Svensson, Skandiabanken’s chief economist.

Foreign trade in services contributed 1.2-percentage points to the increase in GDP in the third quarter but Svensson questioned the correctness of the figures and pointed out that the concept of foreign trade in services is diffuse.

Nevertheless growth is healthy and is expected to be around 3.5 to 3.8 per cent in 204. In addition, a welcome surprise is that investments have increased by 8.8 per cent in the third quarter.

Resolution on sick leave

As expected, the Swedish Riksdag passed a resolution last week forcing employers to pay 15 per cent of their employees’ sick pay from the 15th day of sickness and as of 1 January 2005.

The Confederation of Swedish Enterprise has warned that many employees who are on long-term sick leave will lose their jobs as a result of the reform but yesterday Hans Karlsson, minister for employment, promised to change the rules, should the Confederation’s fears be realised.

Arla merges with Campina

On Wednesday it was confirmed that Arla, the Swedish/Danish dairy group, would merge with Dutch dairy Campina, provided the owners approve the deal.

Campina Arla will become the second-largest dairy company in the world, and the largest that is owned by a co-operative of farmers. The new company will have 28,000 employees and annual turnover of 10 billion euro.

Rörstrand pulls out of Sweden

Rörstrand, the porcelain maker, is pulling out of Sweden after 279 years. 155 employees in Lidköping will be made redundant when Rörstrand transfers production to Asia or Eastern Europe.

Billion kronor market for Skanska

The enlargement of the EU has had a positive impact on Skanska’s order books with the construction firm winning orders to a value of 13 billion crowns in the Czech Republic and Poland in the past few months.

“The building sector in the new EU states is strong, particularly within infrastructure but even in commerce,” said Peter Gimbe, Skanska’s information director.

Suspected leak at Gambro

Gambro is to be investigated by the Swedish Financial Supervisory Authority after news leaked out that the healthcare company was to sell its dialysis clinics in the US to DaVita.

Sources: Dagens Nyheter, Svenska Dagbladet, Dagens Industri

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ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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