LO anticipates two good years

The Swedish economy will continue to make strides over the next two years. And, according to a new prognosis by trade union confederation LO, the stranded wage deal in the trade sector is in full compliance with economic developments.

“The wage negotiations are going precisely according to plan,” said LO’s chief economist Dan Andersson.

“The agreements that have been drawn up so far, including that of the Commercial Employees Union (Handels), are completely in line with our prognosis,” he added.

LO’s economists are more satisfied with the Riksbank than they have been for a long time. But, not unsurprisingly, the government comes in for scathing criticism.

“We spare a pleasant thought for the Riksbank; its assessment of monetary policy has become stricter. But we reserve an angry thought for the government for its brutal cutbacks in labour market policy,” said LO’s economist Lars Ernsäter.

GDP growth remained strong in 2006, leading to jobs for 80,000 more people than the previous year. And the good times are set to continue for the next two years, although not quite to the same extent, LO’s economists predict.

“At the same time there is a plentiful supply of workers, so there is no risk of overheating,” said Ernsäter, who is also keen to point out that the current drop in unemployment began before the government introduced its policies.

LO’s economists have expressed a strong dislike for the government’s tax deduction for people with jobs, claiming that it is unfair to pensioners, the sick and the unemployed. They would rather use the 39 billion kronor ($5.5 billion) cost of the tax break to finance higher benefit levels, health insurance and early retirement schemes.