Sweden’s gross domestic product will contract slightly more than expected next year. Both households and firms will be affected by the poor economic condition, the Swedish Ministry of Finance has estimated.
Failure to meet assumptions
Sweden’s economic output will fall by 0.7 percent in 2023. Back in November, the Swedish Ministry of Finance estimated that the country’s gross domestic product would fall by only 0.4 percent. The average annual inflation rate is expected to reach six percent instead of the 5.2 percent originally expected.
“In October, I said that Sweden was entering a phase of economic winter. But now we can see that this winter will be a bit tougher than we thought,” Swedish Finance Minister Elisabeth Svantesson said during a press conference on Thursday.
Renewal only in 2024
However, she said the recession would also last longer than it seemed just a few weeks ago. “The economy is unlikely to rebound from the bottom until 2024,” Svantesson added. It is in 2024 that the Swedish economy is expected to return to growth, but it will only be around one percent. However, the original growth estimate was double that.