The government has made it cheaper to fill up with gas and buy food.
According to Elisabeth Svantesson, there are a couple of reasons behind the forecast of a slowing recession, increased GDP growth and gradually falling unemployment that the National Institute of Economic Research presented on Tuesday.
The recession that KI predicts will end next year has been due to people's cautious consumption and lack of faith in the future. When I took over this job, high inflation was a poison to the economy of ordinary Swedes. To put pressure on inflation, we were restrained, not expansive, and we are reaping the benefits of that now, says Svantesson.
Doped purchasing power
However, economists have warned that the strengthened purchasing power of households and the low inflation rate we are currently seeing is partly a chimera fueled by tax breaks and subsidies from the government, which hides real inflation above target.
In its forecast, KI also flags inflation that is expected to rise above the target of 2 percent next year when energy prices are expected to rise and tax subsidies are removed.
Inflation is at a very low level now. It will not be as low in the future, but there is no forecast that it will be sky-high. If it is around the target, that is the whole point for the Swedish Central Bank. I am not worried that we will have high inflation in the future, says Svantesson.
Increased number of unemployed
Despite a KI forecast of a gradual decrease in unemployment, one of the opposition's trump cards in the debate is that the number of unemployed has increased by 100,000 during the current government's term of office.
Do you receive repeated criticism for not combating unemployment?
When demand increases in the Swedish economy, more people will come to work. Through both benefit reform and reduced taxes, we ensure that more people enter the labor market, says Svantesson.
