Published 24 June 2024 at 15.06
Domestic. Now the government's inflation focus is shifting from fighting to monitoring. This was announced by Finance Minister Elisabeth Svantesson (M) at a press conference.
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– The fight against inflation has been won. Now we shift the inflation focus from fighting inflation to monitoring it. At the same time, the situation in the Swedish economy remains strained with rising unemployment and weak domestic demand. That is why we are now focusing on building Sweden richer again, says Finance Minister Elisabeth Svantesson.
Swedish inflation has decreased and is expected to reach the target during the year. At the same time, the situation on the labor market has deteriorated and unemployment has risen. The Swedish economy is judged to be in a recession until 2025, but recovery is just around the corner. This is stated by the Ministry of Finance in a new forecast for economic development.
– This match, this time, has been won, says Elisabeth Svantesson.
The lower inflation is not least driven by lower energy and fuel prices. Still low energy prices and weak demand in the economy are expected to dampen inflation further in the future.
In Sweden, domestic demand has continued to develop weakly during the beginning of 2024 and both household consumption and housing investment have declined. The negative effects on the Swedish economy of higher interest costs and high inflation are expected by the Ministry of Finance to diminish during the year and a recovery is expected in the future. The recovery takes time, however, as it takes time, among other things, for the housing investments to get started. The economy is therefore assessed to be in a recession up to and including 2025.
– We assess that the recession will last for a while longer, but now that the fight against inflation has been won and interest rates are falling back, while real wages are rising, household consumption is expected to increase, says Finance Minister Elisabeth Svantesson.
The situation on the labor market has continued to weaken during the beginning of the year. Employment has decreased at the same time as unemployment has increased. The demand for labor is estimated to develop weakly in 2024 with continued rising unemployment as a result. During 2025, a gradual recovery is expected as the demand for labor increases.