Swedish government expects GDP to expand 3.5 pct in 2016, 2.3 pct in 2017

The Swedish Finance Minister Magdalena Andersson gave a positive view of Sweden’s economy yesterday. The economy is likely to expand 3.5 percent in 2016 and 2.3 percent in 2017. The Swedish government anticipates the Swedish GDP to grow by 1.9 percent in 2018. Meanwhile, the employment is seen growing 1.8 percent this year, 1.5 percent next year and by 0.6 percent in 2018. This would help lower the jobless rate to 6.3 percent in 2018 from 6.8 percent in 2016.

The Swedish government projects the employment participant rate to rise to a record high of 67.5 percent in 2017 and then fall a bit in the next few years. The participant rate is expected to be back at the 2016 level in 2020. This signifies that the impact of the strong arrival of refugees would ease in 2020, according to Andersson.

The Finance Minister stated that inflation would accelerate slowly, but not attain the target rate of 2 percent until 2018. Moreover, according to Andersson, public sector finances are expected to result in a deficit of SEK 15 billion in 2017 and SEK 8 billion in 2018, or -0.3 percent of GDP and -0.2 percent of GDP respectively. However, in the following year, public finances are likely to record significant surplus.