“Stockholm has been doing quite well after the financial crisis because they lowered local taxes and created an innovative business environment,” said André Jamholt, a press spokesman for the Nordic Council of Ministers.
“So they had a lot of start-ups, and they attracted a lot of foreign direct investment as well.”
According to State of the Nordic Region from the Nordic Centre for Spatial Development (Nordregio), which is published every other year, both Oslo and Copenhagen have suffered compared to Stockholm as a result of tougher migration policies.
“Their demographic dimensions, while still very strong, have softened (due to lower net-migration over time),” the report reads.
Oslo was also hit by a drop in the oil price, since the last ranking in 2016, the report explained.
“Some Norwegian regions have dropped in the ranking as a result of the dropping oil prices, others dropped mainly due to their demography with lower migration rates and older population structure since the last ranking in 2016,” it said.
The region which saw the biggest climb in the index was the Faroe Islands, which leapt 25 percent, because, the report said, it had “retained its good score in the labour force dimension and improved both its demographic and economic dimensions, thanks to higher net-migration rates”.
Four regions in Iceland also climbed sharply up the index as did the region arond Kalmar in Sweden.
The five regions which dropped the most in the index were all in rural areas of Norway and Finland, which face declining and ageing populations. Österbotten in Finland, the worst performer, dropped 16 places.
Along with the ranking, the Nordic Council published its State of the Nordics report, which predicted that the region's population would grow more than 10 percent to 29 million by 2030, largely thanks to immigration.