SHARE
COPY LINK

ECONOMY

Sweden slashes 2013 growth forecast

The Swedish government is cutting its GDP growth forecast for 2013 from 2.7 percent to 1.1 percent, Finance Minister Anders Borg said on Friday.

Sweden slashes 2013 growth forecast

“The recovery is going to be late and fragile. The labour market can be described as weak and soft in the coming years,” Borg told reporters on Friday.

The government also revised its unemployment forecast for 2013, expecting Sweden’s jobless rate to rise to 8.2 percent, compared with the previous forecast of 7.5 percent.

Unemployment is expected to edge up to 8.3 percent in 2014 before dropping back to 7.4 percent in 2015.

Borg added that Sweden would likely run a budget deficit for three years in a row from 2012 through 2014.

“It’s become increasingly clear that the crisis in Europe and developments in the United States are having a negative impact on employment and growth in Sweden,” Borg said in a statement.

“We can expect a weak 2013.”

Borg admitted it would be hard to predict exactly how bad things would get, hinting the government may implement measures to prop up growth next year and ahead in 2014 and 2015.

“It may include reviewing labour market rules and perhaps implement some job creation measures somewhat earlier,” he said.

The government’s previous forecast, released in September, has been roundly criticized as being too optimistic.

And many analysts and institutions have since issued more conservative growth predictions for the Swedish economy.

The lower forecast announced by Borg on Friday brings the government closer inline with other predictions.

Earlier this week, Sweden’s National Institute of Economic Research (Konjunkturinstitutet) said it expected Sweden’s GDP to grow by 0.8 percent in 2013, with unemployment expected to hit 8.3 percent.

The Riksbank, which on Wednesday cut Sweden’s benchmark interest rate down to 1.0 percent, expects 1.2 percent GDP growth in 2013 and a jobless rate of 8.1 percent.

TT/The Local/dl

Follow The Local on Twitter

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SAS

‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers. 

SHOW COMMENTS