Swedish economy set to simmer on

The Swedish economy has reached boiling point and is expected to continue simmering for the foreseeable future. The Stockholm Stock Exchange is also predicted to build on the advances made over the last few years.

According to insurance company Länsförsäkringar, there is little risk that the economy will boil over. While there is increasing inflationary pressure, this can be tempered by Riksbanken raising interest rates a further percentage point to 4 percent.

Households are expected to have more disposable income, paving the way for continued high consumption. And the labour market situation will gradually improve during 2007 and 2008, with 150,000 more people in work.

Länsförsäkringar estimates that, minor blips aside, share prices on the Stockholm Stock Exchange, and in stock exchanges around Europe, will rise by about ten percent this year.

The company further calculates that Sweden’s GDP will increase by 3.8 percent in 2007 and 3.1 percent in 2008.