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Sweden forecasts 0.9 pct economic growth in 2025, recovery in 2026
HELSINKI, June 17 (Xinhua) -- Sweden's economy is projected to grow 0.9 percent in 2025, with a stronger expansion of 2.7 percent expected in 2026, the Swedish National Institute of Economic Research (NIER) estimated in an outlook report published Tuesday.
The institute attributed the current economic sluggishness to both external and domestic factors. Internationally, U.S. trade policy, marked by higher tariffs and policy uncertainty, is weighing on the global economy, leading to weak demand in Sweden's export markets. This trend is likely to persist into next year.
Domestically, Swedish households have been cautious about increasing consumption over an extended period, further restraining growth.
To support the recovery, the Swedish Central Bank is expected to lower its guidance interest rate from the current 2.25 percent to 1.75 percent, amid subdued inflation and weaker overall activity, noted the NIER.
Despite the current challenges, NIER anticipates an economic recovery in the second half of 2025, driven mainly by increased public and private investment in production and a gradual pickup in consumer spending.
Wages are forecast to rise by 3.5 percent in both 2025 and 2026, boosting household purchasing power. Inflation has stabilized and is projected to fall below 2 percent in 2026.
Nonetheless, labor market conditions remain difficult. According to the Swedish Statistics Agency, unemployment stood at 9.7 percent in May, one percentage point up from a year earlier. The NIER expects unemployment to remain around 9 percent in the near term.
The NIER is a government agency operating under the Ministry of Finance.
