Country Forecast Sweden Updater
The Economist Intelligence Unit, May 2013, Pages: 16
The Economist Intelligence Unit believes that the government coalition will hold together until the next election, in September 2014, when it will face a strong challenge from the opposition bloc. Fiscal policy will be slightly expansionary but prudent, focusing on promoting employment (particularly among the young), tax reform and infrastructure investment. The Riksbank (central bank) policy rate was cut to 1% in December 2012 and should remain low in 2013, before returning to around 2% from 2014. We expect a small budget deficit in 2013 and modest surpluses over the remainder of the forecast period. Despite the recession in the euro zone and Sweden's reliance on exports to Europe, export and GDP growth remained moderate and averaged 1.2% in 2012. Output growth is forecast to accelerate gradually in 2013, to 1.8%, picking up thereafter to average over 2.3% per year in 2014-17, supported by stronger external demand and domestic confidence. Inflation on the national measure fell from an average of 3% in 2011 to only 0.9% in 2012 and is forecast at 0.6% in 2013, but should accelerate to around 2% from 2014.
The centre-left opposition Social Democratic Party held its national congress in early April, during which Stefan Lofven was formally confirmed as party leader. Questions about the party's future direction remain unanswered.
In its spring fiscal policy bill the government proposed supplementary investments in education, work experience, infrastructure and regional development, worth Skr3bn (US$455m) over the course of 2013 and 2014. This will not have a substantial impact on the government's finances.
Country Forecast Sweden Updater
Sweden at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Country forecast overview: Highlights
Country forecast overview: Key indicators
Country forecast overview: Business environment rankings
Country forecast overview: Sweden's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure
Fact sheet
Outlook for 2013-17: Political stability
Outlook for 2013-17: Election watch
Outlook for 2013-17: International relations
Outlook for 2013-17: Policy trends
Outlook for 2013-17: Fiscal policy
Outlook for 2013-17: Monetary policy
Outlook for 2013-17: Economic growth
Outlook for 2013-17: Inflation
Outlook for 2013-17: Exchange rates
Outlook for 2013-17: External sector
Data summary: Global outlook
Data summary: Gross domestic product, current market prices
Data summary: Gross domestic product, at constant prices
Data summary: Gross domestic product by sector of origin
Data summary: Growth and productivity
Data summary: Economic structure, income and market size
Data summary: Fiscal indicators
Data summary: Monetary indicators
Data summary: Employment, wages and prices
Data summary: Current account and terms of trade
Data summary: Foreign direct investment
Data sources and definitions
Global data
Domestic data
Abbreviations
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