Published 22 August 2024 at 15.44
Economics. The Swedish economy is in a recession, but recovery is on the horizon. This is stated by the Ministry of Finance in a new forecast.
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– We see that inflation has continued to decrease and is now slightly below the inflation target. We are in the middle of a recession, but we see a lightening now that the battle against inflation has been won, says Finance Minister Elisabeth Svantesson (M).
Swedish growth has stagnated for the past two years and GDP decreased in the second quarter of 2024, but the recovery is expected to begin towards the end of 2024. The economic situation will improve in 2025 and 2026 when GDP growth is expected to increase further, driven by household consumption and increased investment rates, above all in housing .
– We are at a tipping point now that inflation has been pushed down, interest rates are starting to be lowered and real wages are rising. This means relief for both households and companies. In line with this, household consumption is expected to increase at a faster rate. We see that the housing market is also showing some signs of recovery, but it will take time before it takes off, says Elisabeth Svantesson in a statement.
Development in the Swedish labor market has been subdued. Unemployment has risen in the past year and the demand for labor is expected to be low throughout 2024. A recovery in the labor market is expected to begin around the turn of the year.
The overall economic picture from the previous forecast in June 2024 is broadly correct. The Swedish economy is in a recession, but growth is expected to increase in the future.
However, the forecast is uncertain as there are several factors that can affect development, including turbulence on the financial markets and economic and geopolitical developments in the outside world.< /p>
– The Swedish economy is facing a recovery. The focus now is on measures to build Sweden stronger and richer with investments for the future. The reforms in the budget will amount to around SEK 60 billion, says Elisabeth Svantesson.
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