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Sweden hikes GDP forecast

TT/The Local · 5 Jul 2010, 09:13

Published: 05 Jul 2010 09:13 GMT+02:00

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Unemployment is expected to be 8.9 percent this year and decline to 6 percent in 2014. The number of those employed is expected to have increased by 100,000 from 2006-2010.

Public finances are in balance and are forecast to show a surplus in 2012, with the surplus goal of 1 percent GDP restored the year after, the government predicts.

The extent of the scope for reforms is currently uncertain and is deemed to be limited.

"There is substantial uncertainty in the scope of reform possibilities during the whole of the next mandate period," the finance ministry wrote in a statement.

2011 is expected to provide some scope for tax and benefit reforms, expanding slightly by the end of the mandate period.

The government expects GDP to grow by 3.8 percent in 2011, 3.9 percent in 2012, 3.3 percent in 2013 and 2.7 percent in 2014.

The government's projection are considerably more optimistic than several other bodies. The National Institute of Economic Research (Konjunkturinstitutet - KI) in its latest report predicted GDP growth of 3 percent in 2011 and 2.8 percent in 2012, for example.

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But for the current year, in comparison to KI the government is somewhat cautious, with the institute forecasting growth of 3.7 percent for 2010.

The government identified several risk factors - including the state debt crisis in southern Europe, and a "poorly chosen policy mix overseas, with a weak balance between cuts and stimulation measures".

TT/The Local (news@thelocal.se)

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Your comments about this article

10:09 July 5, 2010 by Nemesis
The scope for reforms is not very limited.

What needs to happen is Sweden is this.

The jackboot of a repressive, medieval tax reporting regime that is imposed on small business needs to be reformed. Treating small business's the same as multinationals is crazy. They don't have the resources that multinationals do.

The government needs to order universities to build up connections with new start ups, not just there favourite gift givers in large corporations that can not grow anymore in Sweden.

Tax incentives for new start ups, need to be extended so as to allow growth to be secured in those business's.

The Praktik system in Sweden needs to be abolished. Having workers work for free for companies is a disgrace. That is keeping unemployment artificially high. Also it means that non-EU workers are heavily discriminated against as EU workers are not elligable for Praktik. The fact it is easier for a non-EU natkional to get Praktik shows it for what it is, an abusive, bigoted, system of

abuse of workers. All workers need a level playing field.

Thats just what the starting point should be.

As for those projected GDP growth figures. They are nonsense. The only way Sweden can achieve that is to redirect its foreign aid to Swedish infrastructure construction and open up all its internal markets to European competition.
11:00 July 5, 2010 by EtoileBrilliant
Seems to be a bit of early electioneering going on here. Sweden is an export led economy and the growth forecasts need to take account of the slow down in Europe and possibly China that will occur in the second half of 2010 and 2011.

Whilst I agree with the rate hike last week, the reasons IMO were bogus. How about Central Bankers just say that we need a normalization of interest rates. I don't buy the inflationary pressures argument in today's economy
15:25 July 6, 2010 by dobermann
The Praktik system in Sweden needs to be abolished. Having workers work for free for companies is a disgrace.

In other words this is and official slavery. Why do we need universities if postgraduated person isn't ready for a job market( At least companies say so)?
10:40 August 3, 2010 by cosplay
he Praktik system in Sweden needs to be abolished. Having workers work for free for companies is a disgrace.
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