“Sweden’s export faces large difficulties next year", Swedbank's chief economist said as she warned about a possible "double-dip".

• European Central Bank warns of new bank crisis
• Broad improvement of the Swedish economy

Sweden’s financial position is in top league. But since more than half of the country’s economy derives from export other countries' problems will hurt Sweden.

The picture of the Swedish economy is looking brighter. First quarter GDP rose more than expected and unemployment is anticipated to drop. The International Monetary Fund (IMF) said that Sweden has weathered the global downturn relatively well and applauded the Riksbank and government, pointing out that "aggressive stabilisation policies" had offset the impact of the global financial crisis.

“Sweden has a better situation than many other European countries as we don’t have to tighten government expenditure”, Cecilia Hermansson, chief economist at Swedbank, told The Swedish Wire. “While other countries need to repair a leaking roof, Sweden just need to make sure the roof is solid”.

Deficits and debt in many countries have shot up because of spending to overcome the global economic crisis to levels causing strains on bond markets. Government debt in the 16-nation zone is forecast to reach 88.5 percent of gross domestic product in 2011, or roughly 8.3 trillion euros (10.0 trillion dollars).

Since more than 50 percent of Sweden’s GDP derives from export great challenges await the country’s major export companies.

“Sweden’s export faces large difficulties next year. Governments in many of Sweden’s most important export markets, such as eurozone countries, are putting massive cutbacks of public spending into practice. This will create an uncertainty for the exporting companies", Cecilia Hermansson said.

In a resent report she warned that the rate of the global recovery will slow down the next half year, mainly on the back of tighter fiscal policies. A “double-dip” can therefore not be ruled out.

Export of goods from Sweden increased last quarter for the first time since the financial crisis caused world trade to plunge. Despite the upturn, the export volume during the first quarter of 2010 was still around 10 and 15 percent under the levels of the first quarters of 2007 and 2008.

In the long-term, Swedish exports have proven to be surprisingly robust. A marked shift in the structure of the exports, where services, the IT industry, and telecommunications have taken over from traditional industries such as steel, paper and pulp, has made the Swedish export sector less vulnerable to international fluctuations.

According to material published by the OECD, the total export of goods from G7 countries decreased by 3.3 percent in volume during the fourth quarter of 2009, compared to the fourth quarter of 2008. Italy's exports decreased the most, 12 percent. Germany's exports decreased by 3 percent while the US and Japan had exports decreased by 1 percent each.

SEB, Sweden's third-largest bank by market value, recently said it plans to reduce its investments in European equities and instead put its money in Asia. The bank expects Asian stocks to outperform the European markets during the coming year.