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Sweden hikes growth forecast for 2010, 2011

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Sweden hikes growth forecast for 2010, 2011
Finance Minister Anders Borg in Nyköping on Wednesday
15:58 CEST+02:00
Sweden's government on Friday raised its economic growth forecast to 4.5 percent for 2010 and to 4.0 percent in 2011, a dramatic shift from previous estimates of 3.3 percent and 3.8 percent respectively.

"The Swedish economy has shown an unexpectedly strong development during the first six months of the year," the finance ministry said in a statement.

"The unexpectedly strong and broad recovery, combined with increasingly optimistic hope for the future among households and companies and an improved situation abroad has led the finance ministry to increase its gross domestic product (GDP) forecast for this year and next," it added.

Meanwhile, Finance Minister Anders Borg cautioned that "large risks remain, especially if one looks abroad where many countries are dealing with considerable difficulties in their public finances."

Borg said in the statement. "The government there wants to remain careful. Returning to a surplus is our highest priority so we can defend Sweden against new threats."

The new forecasts were published just a month ahead of Sweden's September 19th elections, with the centre-right government hoping a strong economic recovery will help it win a second four-year term.

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