SHARE
COPY LINK

ECONOMY

Swedish companies optimistic about business prospects

Business conditions for companies in Sweden have continued to improve since the autumn, and forecasts by Swedish business representatives for continued business growth this spring are optimistic, according to a recent study by Statistics Sweden (Statistiska Centralbyrån).

Representatives from all industries, with the exception of the chemical and pharmaceutical industry, are positive about business growth through the summer.

Despite giving the second most positive business assessment in a similar study conducted last fall, 55 percent of chemical and pharmaceutical industry representatives surveyed said they believe that the peak for business growth had passed.

Other industries were far more positive compared to the previous study, also conducted by Statistics Sweden.

The greatest increases in business optimism occurred in the hotel/restaurant and metal industries.

Both sectors, which were on the lower half of the list in the autumn survey, are now among the most positive industries in Sweden, according to the government statistics authority.

Moderate optimism about business growth was expressed in the manufacturing and construction industries as well, while business growth forecasts for the retail industry remained unchanged.

Statistics Sweden’s study was conducted through telephone interviews with management representatives from 323 companies and 18 industries from March 6th to March 17th.

TT/Jody Sherwood

ECONOMY

Swedish economy to grind to a halt as interest rates kick in

Sweden faces an economic slump next year that will see economic growth grind to a complete stop, Sweden's official government economics forecaster, has warned.

Swedish economy to grind to a halt as interest rates kick in

Sweden’s National Institute of Economic Research, which is tasked with tracking the business cycle for the Swedish government, warned in its quarterly forecast on Wednesday that greater than expected energy prices, interest rate rises, and stubborn inflation rates, Sweden was facing a significant downturn. 

The institute has shaved 1.6 percentage points off its forecast for growth in 2023, leaving the economy at a standstill, contracting -0.1 percent over the year. 

The institute now expects unemployment of 7.7 percent in 2023, up from a forecast of 7.5 percent given when in its last forecast in June.

“We can see that households are already starting to reign in their consumption,” said Ylva Hedén Westerdahl, the institute’s head of forecasting, saying this was happening “a little earlier than we had thought”. 

“We thought this would have happened when electricity bills went up, and interest rates went up a little more,” she continued. 

The bank expects household consumption to contract in 2023, something that she said was “quite unusual” and had not happened since Sweden’s 1990s economic crisis, apart from in the immediate aftermath of the Covid-19 pandemic. 

This was partly down to a five percent reduction in real salaries in Sweden in 2022, taking into account inflation, which the institute expects to be followed by a further two percent fall in real salaries in 2023. 

If the incoming Moderate-led government goes ahead with plans to reimburse consumers for high power prices, however, this would counterbalance the impact of inflation, leaving Swedish households’ purchasing power unchanged. 

The institute said it expected inflation to average 7.7 percent this year and 4.6 percent in 2023, both higher than it had forecast earlier.

Sweden’s Riksbank central bank this month hike its key interest rate by a full percentage point, after inflation hit 9 percent in August, the biggest single hike since the 1990s. 

SHOW COMMENTS