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Press release from Ministry of Finance

Rapid economic recovery

Published

The Swedish economy is recovering rapidly after the deep downturn last year. The Ministry of Finance’s latest forecast calls for GDP to grow by 4.7 per cent this year, which is 1.5 percentage points higher than in the forecast presented in connection with the Spring Budget in April. Public finances are also expected to be stronger than in the previous forecast.

The substantial upward revision is due partly to the fact that the economy is recovering more quickly than anticipated. At the same time, multiple confidence indicators point to continued strong growth in the short term. After falling 2.8 per cent in 2020, GDP rebounded in the first quarter of 2021 to the same level as a year earlier. This means that the economy appears to be recovering more rapidly than after earlier economic crises.

As the spread of the virus decreases and restrictions are relaxed, household consumption is expected to increase by 4.7 per cent this year. This is an upward revision of 1.3 percentage points compared with the previous forecast. Swedish exports are also contributing to the growth and are expected to increase by 8.9 per cent. However, there is a risk that the shortage of certain input products and bottlenecks in transport chains may slow global trade and thus also Swedish exports.

The Swedish employment rate is expected to rise in the coming years, with an anticipated increase from 66.8 per cent this year to 68.5 per cent in 2024. The same trend can be seen in labour force participation, which is expected to increase from 73.1 to 73.7 per cent during the same period. Unemployment, which is projected to reach 8.7 per cent this year, is expected to gradually decrease over the forecast period to 7 per cent in 2023 and 2024.

The strong macroeconomic trend has also contributed to an upward revision of public finances from the forecast in the Spring Budget. The Ministry of Finance’s forecast also predicts a balance in public finances in 2022, followed by a surplus in subsequent years. At the same time, the deficit in net lending this year is expected to be significantly lower than previously forecast. The strong upward trend provides higher tax revenue than expected. In addition, the upward revision is attributable to lower-than-projected uptake of business crisis support decided by the Government.

The forecast is based on information available as of 4 June and measures in the extra amending budget presented to the Riksdag on 10 June.

Press contact

Johan Ekström
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 086 32 01
email to Johan Ekström
Isabel Lundin
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Karine Raoufinia
Head of the Macroeconomic Forecasting Division
Phone +46 8 405 96 21
email to Karine Raoufinia, via senior registry clerk
Thomas Bergman
Head of the Division for Public Finances
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk