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TRADE

Sweden warns of sharper than expected economic slowdown

Sweden's government has worsened its economic outlook, bracing the country for slowing growth and rising unemployment.

Sweden warns of sharper than expected economic slowdown
Finance Minister Magdalena Andersson said trade tensions were slowing growth. Photo: Anders Wiklund/TT
In its latest prognosis, the country's finance ministry expects the country's economy to grow by 1.1 percent in 2020, down from the 1.4 percent it predicted in last September's budget. 
 
“We expect growth in Sweden to start slowing,” Finance Minister Magdalena Andersson said as she released the new figures. 
 
“There is a fairly broad consensus on the reason: This is due to trade wars and growing barriers for business, which has generated uncertainty over trade in the future, leading to reduced investment.” 
 
She said that the lacklustre economic growth in Germany had been a particular problem for Swedish exporters. 
 
According to the new prognosis, unemployment will hit 7 percent this year and next year, compared to the 6.4 percent predicted in September. 
 
But Andersson said that Sweden's healthy government finance, the result of years of budget surpluses, put it in a strong position to weather the downturn. 
 
“We can meet this slowdown without any significant cuts,” she said. “We have the lowest government debt since 1977 and compared to other EU countries were are extremely low.” 
 
She described the country's finances as a 'welfare reserve' which would allow the government to keep services running and provide fiscal economic stimulus in bad times.
 
She also said that the government planned this year to channel more money to Sweden's cash-strapped municipalities in through a special spring budget, recognising that growing unemployment is likely to drag on local budgets. 
 
The government could release emergency financing to the municipalities even earlier, she said. 
 
“It's obvious that requirements are greater now and will be greater in future.” 

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ECONOMY

Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.

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