– We do not yet know how cold and grim it will be, said Finance Minister Elisabeth Svantesson at a press conference here.
The government expects Sweden’s gross domestic product (GDP) to shrink by 0.4 percent next year, while inflation could be as high as 5.9 percent. Unemployment is also expected to increase.
Svantesson said that “it is important that the Swedish policy is well balanced both in relation to the need to bring down the high inflation and to be able to handle the downturn in the economy.”
Commenting on the expected decline in GDP, she said that Sweden, as a small country, is affected by the economies of its trading partners. As an example, she mentioned Germany, which “has big problems”.
“The high unemployment rate is problematic and as we are now facing a recession, more people will be left out (of the labor market),” she said.
The government’s outlook is largely in line with what the Institute of Economic Research (KI) said in a report in September.
Even the country’s consumers are gloomy about the coming year. The consumer confidence indicator fell to a record low of 49.7 units in September. This was significantly lower than the 110 points recorded in the summer of 2021.
Among traders, the confidence indicator also decreased, from 91.3 points in August to 81.7 points in September.
The government will present its budget next week.