The government expects unemployment to be 8.4 percent next year. This is a decrease from 8.8 percent this year, but an increase compared to the forecast from September, when the government expected unemployment to be 8.3 percent next year and 8.7 percent this year.
"We are seeing some signs of improvement in the labor market, but they are not as clear. There is still some hesitation when it comes to employers and hiring plans," says Elisabeth Svantesson at a press conference.
When it comes to GDP growth, things look a bit brighter in the new forecast. Household consumption has increased for five consecutive quarters and companies' willingness to invest has also increased, according to Svantesson.
"I have high hopes that things have now seriously turned around," she says.
Recession until 2027
In the Ministry of Finance's updated forecast, GDP growth is expected to end at 1.6 percent this year, before rising to 3.0 percent in 2026. This can be compared with 0.9 and 3.1 percent in the forecast from September.
Elisabeth Svantesson describes it as Sweden still being in a recession, which is expected to last until 2027, but that an economic recovery has begun.
According to her, the fact that unemployment does not keep up with growth is partly due to the fact that there is often a certain lag between growth and unemployment. But also because growth is driven by efficiency rather than by more hours worked.
Cyclical unemployment can be overcome by boosting the economy and having an expansionary budget.
The structural one, which is much more profound and has been a problem for far too long, requires other efforts, she says, mentioning, among other things, establishment jobs and the benefit reform that the government wants to implement.
“Big failure”
The Social Democrats' economic policy spokesman Mikael Damberg says in a comment that it is good that the economy now seems to have turned around, but he nevertheless describes Elisabeth Svantesson's results as "deplorable":
"The deficits are large, growth has been low, unemployment continues to rise, the Swedish people's wallets are thinner and food is more expensive. Now the unemployment forecast is getting worse. It is a major failure."
