Sweden On Path To Economic Recovery But With A Mixed Outlook for 2025

Sweden

Sweden: Sweden's economy entered a recovery phase in the second half of 2024, with GDP increasing by 0.8% in the fourth quarter. Investment and household consumption also showed significant growth. The recovery is expected to continue in 2025, supported by real wage growth, lower interest costs, and accommodative fiscal policy. However, economic uncertainty due to geopolitics and trade policies is expected to slow growth as businesses delays investment and hiring, and households postpone certain expenditures. Swedish export growth is also projected to remain subdued in 2025.

Labour demand remains weak, and unemployment is high, but some labour market indicators have shown improvement. Recovery in employment is expected to start in 2025 and continue in 2026. Inflation, measured by the Consumer Price Index with a fixed interest rate, has remained elevated in early 2025 and is projected to stay slightly above target before stabilising near the 2026 goal.

Source: Government offices of Sweden