• Investors turn to Sweden for shelter
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Is the strength of the currency problematic for Swedish businesses?

Sweden and its Nordic neighbors Norway, Denmark and Finland have emerged as a shelter for international investors dumping bonds from Europe’s most indebted governments.

But some market observers are wondering if Sweden’s tradition of keeping public finances in order and debt under control comes at certain cost to the country’s export-driven economy, namely the headwind of a strong currency.

A number of Swedish companies, such as H&M;, said sales has been dragged down by the strength of the krona.

The Swedish krona hit a two-year high against the dollar on Wednesday and closed in on a 10-year peak against the euro as better than expected trade data boosted the currency.

“But is the strength of the krona really something that investors should to bite their nails about? Maybe not”, a Wall Street Journal blogger wrote, claiming there is a tendency to overestimate the effect the krona has for the large listed Swedish exporters.

Many Swedsh multinational firms have been moving a steadily increasing proportion of costs and production abroad, making them less vulnerable to fluctuations.

Trade figures for December showed exports continuing to outpace imports, in spite of the krona’s strength. At the same time Riksbank Governor Stefan Ingves said that the strength of the currency was long overdue. The central bank has raised interest rates four times since July.

With record growth, healthy public finances, booming exports and a soaring krona, Sweden has easily skirted Europe's debt woes. In Davos ex-US president Bill Clinton joined the chorus of admirers of the Swedish economic achievements as the Swedish model seems to be back in fashion.

The economy grew 5.5 percent last year and will probably expand 4.4 percent this year, the Central Bank estimates.

“Optimism, both among consumer and and businesses, is back to pre-crisis levels and so far even the stronger krona hasn’t managed to spoil the Swedish party”, the WSJ said.