• Sweden hikes economic growth forecast
• Sweden's Budget Bill for 2011 - from crisis to full employment

Forecast for the Swedish economy (12 October 2010)

Sweden has come through the crisis better than most countries. The recovery in the Swedish economy is broad and is moving ahead fast. As a result, the labour market is recovering. However, there is still great uncertainty about the future development of the economy. Major problems in government finances in other countries may affect the Swedish economy as well.

High growth in 2010 and 2011

The Swedish economy is still in recession with low resource use and high unemployment. But the recovery is under way on a broad front. The Swedish economy has recently been experiencing unexpectedly strong growth. Forward-looking indicators suggest that strong and broad recovery is continuing in 2010. Both domestic demand and exports are important drivers of the recovery. The permanent effects of the crisis are expected to be less pronounced than previously assumed, which will mean more rapid recovery.

Clear recovery in the labour market

As demand and production rise in the years ahead, employment and the number of hours worked will increase, particularly in the service sector. In all, the number of people employed is forecast to rise by approximately 220 000 between 2010 and 2014 as a result of the economic recovery, Government policies and a growing population.

Risks of weaker growth predominate

Despite the increasingly positive developments, there is still great uncertainty about the future development of the economy. Large-scale problems in government finances in other countries may affect the economic trend. It is also unclear how the crisis has affected the way in which the economy functions, which means it is also uncertain how high an economic growth rate is sustainable in the long run.

Key indicators in the Budget Bill for 2011

Change in per cent, key indicators from the 2010 Spring Fiscal Policy Bill in parentheses

	2009	2010	2011	2012	2013	2014
GDP	-5.2	4.8	3.7	3.4	3.3	2.8
	(-4.9)	(2.5)	(3.9)	(3.5)	(3.2)	(2.9)
GDP-gap*	-5.7	-3.3	-2.5	-1.6	-1.1	-0.5
	(-5.3)	(-4.4)	(-2.9)	(-1.9)	(-1.1)	(-0.3)
Employed**	-2.1	1.0	1.1	1.2	1.3	1.2
	(-2.1)	(-0.4)	(-0.7)	(1.3)	(1.2)	(1.1)
Hours worked**	-2.6	1.9	1.1	1.4	1.5	1.3
	(-2.6)	(-0.1)	(1.3)	(1.5)	(1.4)	(1.3)
Unemployed***	8.3	8.4	8.0	7.4	6.7	6.0
	(8.3)	(9.2)	(8.8)	(8.0)	(7.3)	(6.7)
Wages****	3.4	2.5	2.6	3.1	3.3	3.4
	(3.4)	(2.3)	(2.5)	(2.9)	(3.3)	(3.4)
CPI*****	-0.3	1.2	1.5	1.9	2.4	2.6
	(-0.3)	(1.3)	(1.6)	(2.2)	(2.7)	(2.7)
Net lending******	-1.2	-1.3	-0.4	1.0	2.0	2.9
	(-0.8)	(-2.1)	(-1.0)	(0.4)	(1.3)	(2.2)
Central government debt, per cent of GDP	37.0	34.6	32.4	29	25.7	21.1
	(37.6)	(36.6)	(34.8)	(32.8)	(29.4)	(25.3)