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ECONOMY

Swedish growth hits European big league

Sweden has exceeded analysts' economic forecasts with quarterly growth up 1.4 percent and year-on-year figures placing the country at the top of the European pile.

“Seasonally adjusted gross domestic product (GDP) increased by 1.4 percent compared to the fourth quarter of 2009,” Statistics Sweden said.

Analysts surveyed by Dow Jones Newswires had expected the Swedish economy to grow 1.3 percent in the first three months of the year.

Sweden’s GDP expanded three percent in the 12 months to March 2010, the statistics office said.

Swedish bank Handelsbanken said that “all-in-all, these figures show that Sweden stands out as a top performer in the EU family.”

The country was hard-hit by the global economic crisis but its economy quickly bounced back, returning to growth in the second quarter of 2009, with a 0.7 increase in GDP.

The economy then expanded 0.3 percent in the third quarter and 0.4 percent in the fourth quarter last year, Statistics Sweden said in figures revised sharply upwards.

In March, it had said fourth quarter GDP slipped 0.6 percent compared to the July-September period.

No reason for the revisions was immediately given.

Although it suffered its worst contraction in 70 years in 2009, this year Sweden is expected to be among the strongest in Europe.

The government said in April it expected the economy to grow 2.5 percent in 2010, while the Organisation for Economic Development and Cooperation (OECD) predicts a 1.6 percent gain.

For 2011, Sweden forecasts growth of 3.9 percent and the OECD 3.2 percent.

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ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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