The Government is lowering the inflation forecast and raising the growth forecast for this year.
Whether this means increased reform space in the autumn budget is, however, unclear.
— There is no automatic link in this, says Finance Minister Elisabeth Svantesson (The Moderate Party).
The battle against inflation is now won. The Finance Minister is firm on this in connection with the Ministry of Finance's new economic forecast.
After the inflation trend has slowed down significantly in recent times, inflation is estimated to amount to 2.8 per cent according to the CPI measure. This can be compared to 3.1 per cent in the April forecast, and lower electricity and fuel prices are seen as the main reasons.
— The risk picture looks different compared to a year ago. We feel very happy to say that we have left the inflation-fighting phase, says Elisabeth Svantesson at a press conference.
A certain upward adjustment
As regards economic growth, the forecast is raised to 1.4 per cent from the previous 0.7 per cent, and Svantesson notes, among other things, that Europe's largest and most important economy – Germany – has now recovered. This is also beneficial for the Swedish part.
However, the growth forecast is adjusted downwards to 2.4 per cent for next year, from 2.5 per cent.
— There are very small differences compared to the spring forecast. We are now entering a new phase, can shift gears and have a different economic policy that focuses on growth, says the Finance Minister.
Weakened labour market
One problem is, however, the weak development on the labour market.
It is an altogether too high unemployment rate. It is tough and a lot to do to facilitate their return, says Svantesson about the group that has ended up in unemployment.
When it comes to next year's budget, Svantesson is also cautious:
— It has been a harsh winter, but even if the sun shines and it is warm, it is not as if the Swedish economy is entering a summer. The fact that the battle against inflation is won is good, but it is still a low-growth economy and there are risks. We have a number of challenges to solve, says she.
In response to a question from TT regarding whether the new economic situation provides increased reform space, Svantesson answers:
— There is no automatic link in this, even if the battle against inflation is won, it does not automatically mean greater reform space. Exactly how large the reform space will be, we will return to in August.
