According to the Minister of Finance, the conditions for the economy to turn around look good. In addition to increased trade, there will be support from higher real wages and tax cuts, as well as lower interest rate pressure on households, according to Elisabeth Svantesson.
But we are in a low-growth economy, she says.
We see a weak trend towards more companies wanting to hire. It is in line with the economy turning around, she adds about unemployment.
"Need for stimulus"
Svantesson has flagged for a spring budget with 11.5 billion kronor in new investments.
We have room and we will present a spring budget of 11.5 billion. It's money that will go into the economy. It's well-balanced in this situation, she says.
She does not want to specify what the government wants to invest in.
The low-growth economy has become more prolonged. Then there is a need for stimulus, she says.
The forecast for Swedish GDP growth is raised to 2.1 percent this year, from previously 2.0 percent. The unemployment forecast is raised to 8.6 percent from previously 8.4 percent this year. At the same time, the forecasts for both inflation and the Swedish Central Bank's interest rate are raised.
Even though the economy is turning around and the recovery has begun, many people still have it very tough, says Svantesson.
Many struggle to make ends meet, she adds.
The major economic risks she sees in the uncertainty surrounding the Ukraine war and how the Trump administration's trade war against the rest of the world develops.
How things go in Germany is also important for the Swedish economy and Swedish companies, she notes.
Germany needs investments
She welcomes that the German parliament, the Bundestag, has opened up for massive investments in defense and infrastructure, with exceptions from the country's strict budget rules, with the so-called debt brake.
It's good if the German economy gets going now. Germany has many problems. Partly many structural problems that may not be solved by money. But they also need investments, says Svantesson.
According to the Minister of Finance, her government is on the same track.
Last year, defense spending was significantly increased and orders were also made for 126 billion last year. That "Buy, buy, buy" - we do. We act. It's the same now. We continue to invest in defense, infrastructure, and energy systems.
The Ministry of Finance raises its GDP forecast for this year to 2.1 percent. In the December forecast, they counted on 2.0 percent. But for 2026 and 2027, the forecast is lowered to 2.8 percent and 2.4 percent, respectively - compared to previously 3.0 percent and 2.5 percent.
The unemployment forecast for this year now points to 8.6 percent on average, up from 8.4 percent in the December forecast. The Ministry of Finance expects it to then decrease step by step to 7.6 percent in 2028.
The forecast for CPIF inflation is raised sharply to 2.5 percent this year, up from 2.0 percent in the previous forecast. But then it is expected to fall back to 1.9 percent in 2026 and land on the Swedish Central Bank's target of 2.0 percent in 2027 and 2028.
The government also raises its forecast for the interest rate to 2.25 percent in 2026, up from 2.00 percent in the previous forecast.
