Sweden boosts economic growth forecast

Sweden boosts economic growth forecast
The Swedish government on Thursday raised its economic growth forecast for this year and said unemployment would shrink significantly, following the recent publication of strong statistics.

Finance Minister Anders Borg told reporters that the government now expects Sweden’s gross domestic product this year to grow 4.8 percent, up from its previous estimate of 3.7 percent.

“We now predict growth of well above four percent, which signifies that we already now have erased the impact of the crisis and that we will continue to see rapid growth,” Borg said.

For 2012, the government now expects Sweden’s economy to grow 3.5 percent, slightly higher than its previous estimate given in October of 3.4 percent, the finance ministry said.

After suffering a deep recession during the global financial crisis, with its GDP shrinking 5.3 percent in 2009, Sweden’s economy has rapidly recovered, posting 5.5 percent growth in 2010.

In the fourth quarter last year, the economy posted year-on-year growth of 7.3 percent, the highest since the national statistics agency started recording quarterly data in 1970.

“Like the United States, our gross domestic product now stands at the same level it did in 2008. But contrary to the United States, our employment level has also returned to the 2008 level,” Borg said.

After hitting a peak of 8.4 percent in 2010, unemployment is expected to sink to 7.4 percent this year, the government said, revising down its previous 2011 estimate of 8.0 percent.

The Swedish jobless rate is then expected to sink further to 6.7 percent in 2012 and should drop below five percent in 2015, according to the new forecast.

“This brings us to the level we had in the 1980s,” before Sweden’s deep economic crisis at the beginning of the 90s that sent unemployment figures skyrocketing, Borg stressed.

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