New figures from Statistics Sweden (SCB) show that Sweden’s GDP was unchanged in the second quarter and only 0.7 percent up on the corresponding period of 2007.
The new figures indicate that Sweden’s year-on-year GDP growth is at its lowest since 2001.
The government, and finance minister Anders Borg, have been roundly criticised by the opposition parties and the business sector alike.
Social Democrat party economic spokesperson Thomas Östros laid the blame squarely at the feet of the finance minister.
“He has waved away all of the concerns over inflation, all the concerns over growth, and as a consequence he presented a spring budget devoid of action. Now the economy has ground to a halt; these are serious errors of judgment,” Östros said.
Östros argues that the government has to take the initiative to stimulate an increase in investment in infrastructure, research and education.
“Furthermore we need to strengthen Swedish productivity. It remains very low and this is of great concern for our competitiveness. It is thus totally wrong to cut back on education and training as the government has done,” Östros said.
Criticism has also come from the Association of Small Businesses (FF) which wants the government and the Riksbank to reconsider its economic policy.
“The government has made a great many people employable but has not taken care of that which companies need in order to employ more people. Small businesses have created 80,000 new jobs over the past five years while large companies and the public sector have cut back 10,000 people,” Anna-Stina Nilsson of FF said to news agency TT.
The association would like to see the cost of employing people to be cut. They would also like the government to review employment protection regulations that govern the order of priority when determining redundancies.
Analysts have interpreted the figures to mean that unemployment will increase. The Riksbank will also have problems keeping to its projected program of interest rate rises planned for the autumn.
Finance minister, Anders Borg has issued a statement through his press secretary stating that he will comment on the figures from SCB tomorrow, Saturday.