• Sweden's news in English

Sweden coming out of recession: Riksbank

Paul O'Mahony · 18 Aug 2009, 17:01

Published: 18 Aug 2009 17:01 GMT+02:00

Facebook Twitter Google+ reddit

The bank's monetary policy would continue to focus on dampening the effects of the recession, with the historically low benchmark interest rate set to remain at 0.25 percent for the coming year.

"The situation in the financial markets has improved and the new information received during the summer confirms the view that the deep recession has bottomed out," said Öberg.

Öberg said the country's GDP drop was unlikely to be as severe in 2009 as the Riksbank had initially predicted. In its July Monetary Policy Report, the central bank saw GDP plunging by more than 5 percent.

But Öberg stressed the the recovery would take some time time, with GDP not expected to reach pre-crisis levels until 2012.

The Riksbank stood by its prediction that unemployment would peak at 11 percent in 2011, although it was encouraged by employment figures in June that were marginally better than anticipated.

Inflation remains "much higher" in Sweden than in the EU but underlying inflation was "entirely in line with our forecast" and the krona has strengthened quicker than the central bank predicted at its July monetary policy meeting.

Öberg said Sweden was now benefiting from a policy of building up surpluses in its public finances and current account.

"[T]his is a much better situation than in many other countries, such as the United Kingdom, where public finances have also deteriorated substantially, but where they had a deficit to start with," he said.

Story continues below…

In summary, Öberg noted that "the new information received during the summer tends to point to a slightly stronger economic activity than we had forecast at the beginning of July."

He added however that the Riksbank "will not make an overall assessment of economic developments until it is time for our next monetary policy decision on 2 September. It is likely that more information will have come in by then and we will have to update our forecasts."

Paul O'Mahony (paul.omahony@thelocal.com)

Facebook Twitter Google+ reddit

Your comments about this article

19:20 August 18, 2009 by Russ Cobleigh
Does this mean the job market will get better?
20:56 August 18, 2009 by Weekend_warrior
It says they have not changed their opinion that unemployment will continue to rise into 2011, before improving. Even then, that is when it will peak, it will be quite a while before it is back to levels before the global recession.

I think with all the deleveraging (unwinding of toxic assets) the banks still have to do, as well as current concerns in the commercial real-estate market, that this is quite a bold statement on their part. So unemployment will peak in 2011, is Sweden going to have a jobless recovery? Credit is a little hard to come by right now.

A huge portion of these boosted 2nd quarter results was due to companies cutting costs. Consumer spending is still down.
21:40 August 18, 2009 by Greg in Canada
Even if the recession is showing signs of being over, look for a painfully slow recovery.
21:46 August 18, 2009 by justanotherexpat
0.25% for the coming year? Excellent! Cheap mortgage continues, higher disposable income remains. Happy with that.
04:12 August 19, 2009 by Weekend_warrior
Now is a fine time to be looking into buying a house or perhaps refinancing into fixed rate or lower APR if its suitable. However I would stay out real-estate for investment purposes altogether. Don't expect to buy a house on the cheap in expectation of a boom, that won't come.

In fact last I had read, think it was on here even, Sweden's residential real-estate was doing fine, it was commercial that was hurting presently. So you might not get the depressed prices you were hoping for. I would wait for that shoe to drop before making a move.

In the U.S. I will watch what happens to the coming Alt-A mortgages resetting in 2010-11, hopefully a lot of those people refinanced into fixed rate.

For now I will stick to REITs as my real-estate play, maybe even one of the new toxic asset funds. I would like to one day perhaps by a condo for 100k, 20k down that I can rent out to cover mortgage and generate some nice side income.
11:04 August 19, 2009 by mac_007
The world has spent a staggering 11.9 trillion dollars to wriggle out of the financial crisis, the sum which is enough to finance a 1,779

pound handout for every person living on the planet.

Seasonally adjusted unemployment stood at 9.4 percent, up from 9.3 percent in May, the European Union's Eurostat data agency said. The figure stood at 7.5 percent 12 months ago.

It meant that the number of people out of work rose by 158,000 over the month, to bring the total number of job seekers in the single currency bloc to 14.9 million.

The unemployment rate in the full 27-nation EU stood at 8.9 percent in June, also up by 0.1 percentage point over May. This compares to a rate of 6.9 percent in June 2008, Eurostat said.
Today's headlines
Dylan removes Nobel-mention from website
The American musician has more or less responded to the news with silence. Photo: Per Wahlberg

American singer-song writer Bob Dylan has removed any mention of him being named one of this year’s Nobel Prize laureates on his official website.

Refugee crisis
Asylum requests in Sweden down by 70 percent
Sweden's migration minister Morgan Johansson. Photo: Christine Olsson/TT

Sweden received 70 percent fewer requests for asylum in the period between January and September 2016 than it did during the same time last year, the country’s justice and migration minister Morgan Johansson has revealed.

The unique story of Stockholm's floating libraries
The Stockholm archipelago book boat. Photo: Roger Hill.

Writer Roger Hill details his journeys on the boats that carry books over Stockholm's waterways and to its most remote places.

Refugee crisis
Second Stockholm asylum centre fire in a week
The new incident follows a similar fire in Fagersjö last week (pictured). Photo: Johan Nilsson/TT

Police suspect arson in the blaze, as well as a similar incident which occurred last Sunday.

More misery for Ericsson as losses pile up
Ericsson interim CEO Jan Frykhammar presenting its third quarter results. Photo: Claudio Bresciani/TT

The bad news just keeps coming from the Swedish telecoms giant.

Facebook 'sorry' for removing Swedish cancer video
A computer displaying Facebook's landing page. Photo: Christine Olsson/TT

The social media giant had censored a video explaining how women should check for suspicious lumps in their breasts.

Watch this amazing footage of Sweden’s landscapes
A still from the aerial footage of Sweden. Photo: Nate Summer-Cook

The spectacular drone footage captures both Sweden's south and the opposite extreme, thousands of kilometres north.

Sweden could be allowed to keep border controls: EU
Police ID checks at Hyllie station in southern Sweden. Photo: Stig-Åke Jönsson/TT

Sweden could be allowed to keep ID controls on its border with Denmark beyond the current end date of November, following discussions among EU leaders in Brussels last night.

Why women in Sweden will work for free by November
File photo of a woman working in a Swedish office. Photo: Anders Willund/TT

A new study into the gender pay gap suggests Sweden still has some work to do.

Look familiar? Meet your jawbone's ancestor
Thank God for evolution, eh?

There's something fishy about the human jawbone – it has its origins in the placodermi, a jowly species of fish that lived 400 million years ago, Swedish and Chinese researchers say.

Sponsored Article
This is Malmö: Football capital of Sweden
Fury at plans that 'threaten the IB's survival' in Sweden
Sponsored Article
Where is the Swedish music industry heading?
Here's where it could snow in central Sweden this weekend
Analysis & Opinion
Are we just going to let half the country die?
Blog updates

6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »


8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »

Sponsored Article
7 reasons you should join Sweden's 'a-kassa'
Angry elk chases Swede up a lamp post
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
People-watching: October 20th
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Sponsored Article
Stockholm: creating solutions to global challenges
Swede punches clown that scared his grandmother
Sponsored Article
Swedish for programmers: 'It changed my life'
Fans throw flares and enter pitch in Swedish football riot
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Top 7 tips to help you learn Swedish
Property of the week: Linnéstaden, Gothenburg
Sponsored Article
How to vote absentee from abroad in the US elections
Swedish school to build gender neutral changing room
People-watching: October 14th-16th
Sponsored Article
'There was no future for me in Turkey'
Man in Sweden assaulted by clowns with broken bottle
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
Nobel Prize 2016: Literature
Sponsored Article
Stockholm: creating solutions to global challenges
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Record numbers emigrating from Sweden
Sponsored Article
'There was no future for me in Turkey'
People-watching: October 12th
Sponsored Article
Where is the Swedish music industry heading?
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
Sponsored Article
Last chance to vote absentee in the US elections
How far right are the Sweden Democrats?
Property of the week: Triangeln, Malmö
Sweden unveils Europe's first elk hut
People-watching: October 7th-9th
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
Missing rune stone turns up in Sweden
Nobel Prize 2016: Chemistry
jobs available