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QUALITY OF LIFE

40% of Swedes report improved finances: poll

Four out of ten Swedes believe that their wallets have fattened over the last four years, a TV4/Novus poll reveals.

Stockholmers believe their finances have improved the most, while many Norrbotten residents think theirs has worsened, according to the survey.

According to the poll, which was commissioned by TV4 and undertaken by Novus, 44 percent of Swedes reported that their financial situation has improved over the last four years, while 27 percent said that the economy has worsened under the centre-right government.

The improved financial circumstances have also led many to believe that life has become easier. Forty-three percent responded that they believe that their quality of life has improved. However, one-fifth reported that their quality of life has declined, while a third think that it is unchanged.

There are large regional differences according to the survey. Those who have benefited the most from government policies live in Stockholm. Nearly half the capital’s inhabitants reported an improvement in their finances in recent years, the highest rate in the country. In contrast, in Luleå, 40 percent reported that their finances worsened.

“Everything is possible, both when one has a job or does not have a job and when one is sick,” Luleå’s Jessica Rognäs told TV4. “I think it has gotten a lot worse.”

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ECONOMY

Swedish economy to grind to a halt as interest rates kick in

Sweden faces an economic slump next year that will see economic growth grind to a complete stop, Sweden's official government economics forecaster, has warned.

Swedish economy to grind to a halt as interest rates kick in

Sweden’s National Institute of Economic Research, which is tasked with tracking the business cycle for the Swedish government, warned in its quarterly forecast on Wednesday that greater than expected energy prices, interest rate rises, and stubborn inflation rates, Sweden was facing a significant downturn. 

The institute has shaved 1.6 percentage points off its forecast for growth in 2023, leaving the economy at a standstill, contracting -0.1 percent over the year. 

The institute now expects unemployment of 7.7 percent in 2023, up from a forecast of 7.5 percent given when in its last forecast in June.

“We can see that households are already starting to reign in their consumption,” said Ylva Hedén Westerdahl, the institute’s head of forecasting, saying this was happening “a little earlier than we had thought”. 

“We thought this would have happened when electricity bills went up, and interest rates went up a little more,” she continued. 

The bank expects household consumption to contract in 2023, something that she said was “quite unusual” and had not happened since Sweden’s 1990s economic crisis, apart from in the immediate aftermath of the Covid-19 pandemic. 

This was partly down to a five percent reduction in real salaries in Sweden in 2022, taking into account inflation, which the institute expects to be followed by a further two percent fall in real salaries in 2023. 

If the incoming Moderate-led government goes ahead with plans to reimburse consumers for high power prices, however, this would counterbalance the impact of inflation, leaving Swedish households’ purchasing power unchanged. 

The institute said it expected inflation to average 7.7 percent this year and 4.6 percent in 2023, both higher than it had forecast earlier.

Sweden’s Riksbank central bank this month hike its key interest rate by a full percentage point, after inflation hit 9 percent in August, the biggest single hike since the 1990s. 

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