Sweden to lower growth forecast: Borg

Sweden to lower growth forecast: Borg
Swedish Finance Minister Anders Borg said Tuesday he would revise downwards his 2012 growth forecast, disparaged by economists as being overly optimistic, by the end of the year.

“The outlook for the Swedish economy is deteriorating” and “a new forecast will be presented by the end of the year,” Borg said in a speech in Stockholm.

In its 2013 budget bill presented to parliament on September 20, the centre-right government predicted growth of 1.6 percent in 2012, 2.7 percent next year and 3.7 percent in 2014.

Many economists have criticised those figures as outdated after Statistics Sweden revised downwards its second quarter growth figures in mid-September and as the European economy continues to deteriorate.

The Swedish central bank has also issued a much more conservative outlook, anticipating growth of 0.9 percent this year and 0.7 percent next year.

“Reality has caught up with Borg,” Swedbank chief economist Cecilia Hermansson said in the online edition of daily Svenska Dagbladet.

“Swedish industry and production are facing tougher challenges than usual,” she said.

Meanwhile, international credit rating agency Standard & Poor’s also noted the difficulties facing Sweden’s economy, where exports account for half of gross domestic product.

“We believe the economic outlook for Sweden is weakening, with signs of the economy slowing more sharply than expected,” S&P said as it downgraded the outlooks for eight Swedish banks.

“We believe the negative trends in the Swedish economy will be in part driven by a slowdown in the eurozone that will be more protracted and deeper than we previously expected,” it added.

Statistics Sweden is scheduled to publish a first estimate of Sweden’s third quarter growth figures on November 29.

AFP/The Local/og

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