Sweden cuts 2025 growth forecast again due to global uncertainty
Its latest forecast, given in May, was for growth of 1.8% this year and 2.3% in 2026.
"The recovery that began in the second half of 2024 has stalled, and the Swedish economy is in a prolonged downturn, largely due to increased uncertainty in the world," the Finance Ministry said in a statement.
"However, rising real wages and lower interest rates suggest that the recovery will gain momentum in the second half of 2025," it added.
In May, Svantesson cut the GDP forecast for 2025 from 2.1% blaming U.S. President Donald Trump's on-again, off-again tariffs for increasing geopolitical uncertainty and leading businesses and households to hold off on new spending.
The central bank has a forecast for growth this year of 1.2% while leading think-tank NIER's latest outlook sees GDP expanding 0.9%.
Earlier this month, the central bank cut its key interest rate to 2.00% from 2.25% and said that, with price pressures weak, it may ease further before the end of the year to boost sluggish growth.
Gross domestic product shrank 0.2% in the three months to March 31 on a quarterly basis.
In 2024, GDP growth was 1.0%.
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