Swedish consumption hit record levels in 2007

Household consumption in Sweden rose by a record seven percent in 2007, reaching an all-time high, while the gap between rich and poor expanded to new levels, Statistics Sweden said on Thursday.

“Households’ disposable income increased by seven percent last year. This is the largest increase since measurements began in 1975,” it said in a statement.

“At the same time, the gap between low and high incomes has never been greater,” it added.

A spokesman told AFP the average Swedish household had a disposable income of 214,300 kronor ($27,540) last year, compared to 200,000 kronor a year earlier.

The poorest 10 percent of households in Sweden had a disposable income of 76,700 kronor, while the richest 10 percent had more than seven times that amount at 542,500 kronor.

Statistics Sweden attributed the sharp rise to increased income from work and capital, while taxes have been cut at the same time.

It said that over 12 years, from 1995 to 2007, household disposable income rose by 44 percent on average.

Among the poorest households were people who were students, unemployed or on long-term sick leave.

Since 1995, employees’ disposable income rose twice as much as those who were without jobs.

Since the Swedish centre-right government came to power in October 2006, it has introduced a series of measures aimed at inciting Swedes to return to the job market instead of living off the country’s generous state benefits, including tax cuts and lower unemployment compensation.

In September, the government said about 97 percent of full-time workers now benefit from tax cuts of more than 1,000 kronor a month compared to 2006.