Swedish growth to slow in 2011: IMF

Swedish growth to slow in 2011: IMF
Photo: Henrik Montgomery/Scanpix (file)
Swedish growth will slow in 2011, from around 3 percent today to 1.9 percent, according to a new prognosis from the International Monetary Fund (IMF).

Unemployment will fall slightly from 9.3 to 8.8 percent, the fund predicts.

The Swedish economy’s recovery from last year’s 5.1 percent fall in GDP is entering an uncertain phase. The debt crisis in the eurozone is the main reason, the IMF says.

The IMF’s expectations for the Swedish economy are considerably more modest that those outlined by Finance Minister Anders Borg earlier this month.

Borg said he expects the rate of growth in the Swedish economy to rise from 3.3 percent this year to 3.8 percent next year. Unemployment will fall to 7.5 percent in 2011, Borg believes.

The IMF argues that the Swedish krona, the weakening of which was a crucial factor in reversing the fall in Swedish GDP, has now turned a corner. The strengthening currency together with austerity measures in crisis-hit eurozone countries will hit demand for Swedish exports, the fund believes.

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