'Sweden has landed on its feet after the crisis'
Sweden's finance ministry revised upwards its economic growth forecast for 2009 and 2010 on Monday, saying that the economy would shrink by 4.9 percent this year compared to a previous forecast of 5.2 percent.
| Related news: • Swedish krona tipped to rally next year • Sweden holds interest rate at record low |
For 2010, Finance Minister Anders Borg's outlook for gross domestic product rose sharply, from 0.6 percent forecast in August to 2.0 percent.
"There is reason to be more optimistic about developments in the Swedish economy," Borg told reporters, saying there were positive signs the global economy was recovering.
"Sweden has landed on its feet after the financial crisis," he said. "We have avoided a depression as well as a crisis in the banking sector."
Borg said he expected Sweden to be one of the first countries to recover fully from the global economic downturn.
"We are better placed than other countries, since we don't need to clean up our public finances," Borg said.
"Sweden and Denmark have the strongest public finances of all industrialised countries," he boasted.
For 2011 and 2012, Borg predicted growth of 3.4 and 3.3 percent respectively.
Unemployment was however expected to remain high in the coming years, in what is seen as a dark cloud hanging over the centre-right government.
Swedish Prime Minister Fredrik Reinfeldt has made getting Swedes into the workforce his number one priority since coming to power in 2006 but due to the crisis the jobless rate has risen significantly, with less than a year to go until next September's general election.
Borg predicted unemployment would hit 8.5 percent of the workforce this year and 10.7 percent next year, before falling back to 10.5 percent in 2011 and 9.8 percent in 2012.
"The situation on the labour market will remain difficult," he warned.
He said economic stimulus measures implemented during the crisis ought to stay in place for the next few years.
"Economic policy must remain expansive in the future. It will be a challenge to create new jobs," he stressed.
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Last Updated (Monday, 09 November 2009 14:16)
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