STOCKHOLM, Dec. 22 (Xinhua) — Sweden will enter a recession next year that is expected to last until 2025, the government said here Thursday.
“The Swedish economy and households will be under pressure in the coming years,” Finance Minister Elisabeth Svantesson said when she presented the economic forecast at a press conference.
– The recession is expected to be more protracted than the budget bill predicted and it does not look like it will bottom out until 2024, says Svantesson.
Inflation as measured by the consumer price index (CPI) is expected to average 8.9 percent in 2023, and combined with rapidly rising interest rates and weakened demand in the rest of the world, this is expected to lead to gross domestic product (GDP) shrinking by 0.7 percent in 2023 – a downward adjustment from the previous forecast.
Unemployment is expected to grow to 7.8 percent in 2023 and 8.2 percent in 2024. Both figures are higher than in the previous forecast.
“At present, it is important that fiscal policy is carefully considered. The worst-case scenario for households and businesses that are already experiencing financial difficulties would be a further increase in inflation. The government’s budget for next year has undergone cuts in order to fight inflation. , while providing room to act if the economic downturn were to be worse than expected, says Svantesson.
Source: sn.dk