Swedish economy to pick up speed after slow start to year

Reading Time: 2 minutes

Sweden’s economy will grow faster than previously expected this year, the government said on Monday, despite a third wave of COVID-19 infections that has led to tighter restrictions on society.

The government said in a statement it now expects gross domestic product to expand 3.2% in 2021, better than the 3.0% expansion predicted in its latest forecast made in December.

In 2022, the government expects the economy to grow 3.8% versus a previous forecast of 3.7% growth.

“We judge that by the end of this year we will be back at the GDP level we had before the crisis,” Finance Minister Magdalena Andersson told reporters.

The forecasts form the basis of the spring budget which will be published on Thursday.

Sweden’s economy has bounced back relatively quickly from the hit suffered due to the pandemic, which turned out to be milder in 2020 than first feared.

The economy contracted 2.8% last year, much less than initial estimates made at the start of outbreak during the spring, which ran as high as double digits, and better than much of the rest of Europe.

In part, this was due to a response based more on voluntary measures focused on social distancing, rather than the strict lockdowns periodically adopted across much of the continent and by Sweden’s Nordic neighbours.

Growth slowed again at the end of 2020 and is expected to be weak during the first three months of the year, though preliminary figures showed expansions in both January and February compared to the previous month.

The more upbeat outlook for the year is in line with a brighter international picture. The IMF recently revised its global growth forecast to 6.0% for 2021 from 5.5%, also upping its outlook for next year slightly.

Photo: People take photographs of blooming cherry trees in Kungstadgarden park in central Stockholm, Sweden. EPA-EFE/JANERIK HENRIKSSON

Related Stories