High growth ‘likely to continue’

Sweden's current period of high economic growth is likely to persist into 2008, according to a prognosis by the Swedish Retail Institute (Handelns Utredningsinstitut - HUI) released on Thursday.

Strong global growth is one of the reasons for the expected success of the Swedish economy this year and next, HUI says.

“Since 2004, growth has been around five percent, which is strong by historical standards. This growth is expected to continue. Last year’s growth of 5.4 percent is expected to be followed by a further two years of growth at the five percent level,” the report said.

The economic good times are thanks mainly to the fast-growing economies of Asia, particularly India and China, according to HUI.

GDP growth in Sweden will increase from 2.4 percent last year to 3.3 percent this year and 2008. The growth in exports is expected to fall from 8.7 percent in 2006 to 6 percent this year and 5.5 percent in 2008. Household consumption is expected to increase: it rose 2.8 percent in 2006, and is predicted to reach 3.7 percent this year and fall a little to 3.5 percent in 2008.

A generally very positive picture of the state of the Swedish economy was painted by the institute. Swedish households have probably never had such good opportunities to consume, according to the report’s authors.

The booming economy means that Swedish retail has never experienced better times.

“Tax cuts, ever lower unemployment, financially strong households and companies hungry to invest increase the pressure on domestic demand, which among other things makes imports shoot up. Times are quite simply good,” HUI writes.