Sweden flag Sweden: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Despite Sweden's exposure to global trade dynamics, Covid-19 has had a rather limited impact on its economy compared with most other European countries. In 2021, the continued rebound of consumption and investment contributed to an estimated growth of 4% (with the economy returning to its pre-pandemic level by the third quarter of the year). GDP growth is projected to reach 3.4% in 2022, before easing to 2.8% as the post-pandemic catch-up dissipates, with private consumption as the main growth driver (IMF).

Sweden is among rare advanced economies to show both a current account surplus and low public debt in Europe. Monetary and fiscal policies have been supportive since the outbreak of the pandemic, hence the government budget turned negative (-2.4% of GDP in 2021). The 2022 budget increases spending by SEK 74 billion (1.5% of GDP), and includes tax cuts for low-income earners and grants to municipalities to fight the pandemic. A rise in revenues and increased GDP will balance these expenses so that the IMF forecasts the deficit to gradually decrease to -0.7% this year and -0.2% in 2023 (grants from the EU Recovery and Resilience Facility should total around 0.2% of GDP in 2022 and 2023). The country’s debt-to-GDP ratio, although still low, reached 39.6% in 2021, from a pre-pandemic level of 34.9%, and is expected to gradually decrease over the forecast horizon (39.9% and 39% in 2022 and 2023, respectively). Driven largely by higher energy costs, inflation stood at 2% in 2021 but is projected to fall below Riksbank’s 2% target this year (1.6%).

Job creation was impacted by Covid-19 as the services industry slowed activity even when Sweden opted against nationwide lockdowns. The government's compensation schemes limited further unemployment, which was estimated at 8.9% in 2021 by the IMF, while wages, which are largely centrally negotiated, have increased only slightly faster than before the pandemic. The rate is projected to decrease to 7.9% this year and 7.7% in 2023. Overall, Swedish citizens enjoy a high per capita GDP of USD 55,566 (PPP – 2021), 18.5% higher than the EU’s average (USD 46,888), and the European Anti-Poverty Network (EAPN) estimates that only 2% of Sweden’s population lives in serious material poverty conditions.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 533.88e541.06e622.37660.92711.24
GDP (Constant Prices, Annual % Change) 2.0e-2.8e4.03.42.8
GDP per Capita (USD) 51,694e52,129e58,63961,68165,770
General Government Balance (in % of GDP) -0.4e-2.6e-2.4-0.7-0.2
General Government Gross Debt (in % of GDP) 34.9e37.3e39.639.939.0
Inflation Rate (%) 1.70.7e2.74.82.2
Unemployment Rate (% of the Labour Force) 6.88.3e8.97.97.7
Current Account (billions USD) 29.1630.90e29.8528.4826.87
Current Account (in % of GDP) 5.55.7e4.84.33.8

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Swedish Krona (SEK) - Average Annual Exchange Rate For 1 GBP 11.5611.0011.6011.8811.81

Source: World Bank, 2015

 

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Latest Update: June 2022

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