Forecast for the Swedish economy

The global economy has deteriorated rapidly. A major financial crisis with increased uncertainty among households and firms has contributed to a sharp fall in demand all over the world. The world economy is entering the deepest recession of the post-war period.

Extensive measures to stabilise the economy

To mitigate the effects of the financial crisis and the long and deep recession, central banks and governments worldwide have implemented extensive measures to stabilise the economy. These measures have improved the situation in the financial markets, even though the financial turmoil is expected to continue throughout 2009.

Sweden is hit particularly hard when world trade declines

As a small open economy with a large export sector, Sweden is hit particularly hard when world trade declines. The recession is expected to be as severe as the crisis in the 1990s. Labour market conditions will thus worsen considerably. According to the Governments forecast, unemployment will climb to levels close to the highest experienced in the 1990s. At the same time, employment will fall sharply. Not until late 2011 will employment rise again and unemployment begin to decline.

Key indicators from the Government´s forecast, change i per cent (former forecast in brackets)

	Outcome 2008	2009	2010	2011	2012
GDP	-0.2 (1.0)	-4.2 (-0.8)	0.2 (1.5)	2.4 (3.0)	4.0 (3.8)
GDP (calendaradjusted)	-0.6 (0.7)	-4.0 (-0.7)	-0.1 (1.2)	2.5 (3.0)	4.4 (4.1)
Employment	1.2 (1.2)	-2.8 (-1.6)	-3.3 (-1.0)	-1.0 (0.6)	0.6 (1.6)
Hours Worked	1.6 (2.1)	-4.4 (-2.1)	-2.3 (-0.7)	-0.6 (0.5)	-0.2 (0.5)
Unemployment (age 15-74)	6.2 (6.2)	8.9 (7.8)	11.1 (8.6)	11.7 (8.3)	11.3 (8.3)
Wages	4.3 (4.1)	3.3 (3.7)	2.2 (3.0)	2.2 (3.3)	2.5 (3.3)
CPI	3.4 (3.5)	-0.4 (-0.2)	0.3 (0.7)	0.8 (2.1)	1.5 (2.1)