Borg lowers Swedish economic growth forecast

Swedish finance minister Anders Borg said he expects GDP growth of 2.1 percent in 2008 and 1.8 percent in 2009, news agency Direkt reported.

In the autumn budget, the government forecast GDP growth of 3.2 percent in 2008 and 2.5 percent in 2009 but cut these in February to 2.3 percent and 2.2 percent respectively.

Borg said he expects financial market turbulence to last the entire year, although Sweden has to date managed “relatively” well.

He expects investment growth to slow and capacity use to dampen, with export growth remaining cautious.

Borg declined to comment on how much space there is for reforms. He said strong public sector finances indicate there is “some” space, but uncertainty about the forecasts points to caution.