Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Despite Sweden's exposure to global trade dynamics, Covid-19 has had a rather limited impact on its economy compared with most other European countries. GDP returned to its pre-pandemic level in 2021, and continued growing in 2022: the IMF estimated a 2.6% increase in GDP, supported by private consumption and investment. However, the net contribution of foreign trade was negative due to high import growth, and the economy slowed down towards the end of the year. For 2023, pressure on private domestic demand due to higher input costs, consumer prices and interest rates, as well as a tighter monetary policy (variable interest rates on mortgages are widespread) will weigh heavily on growth, with the economy expected to enter a recession (-0.1% as per the IMF forecast, -0.6% according to the EU Commission). The improvement in global economic conditions and slower inflation should contribute to a rebound in 2024 (+2.1%).
Sweden is among the few advanced European economies to show both a current account surplus and low public debt. Despite the phasing out of COVID-19 support measures, new aid packages were implemented to contrast high energy prices and the impact of Russia’s invasion of Ukraine, resulting in a government budget deficit of 0.3% of GDP. However, the general government balance is expected to return into positive territory this year (0.1% of GDP) and in 2024 (1.1% - IMF) thanks to improved tax revenues. The country’s debt-to-GDP ratio is among the lowest in the EU and was estimated at 33.5% in 2022. It is assumed to follow a downward path over the forecast horizon, at 31.2% in 2023 and 28.8% the following year. A sharp increase in imported commodities and in energy prices contributed to a record-high inflation rate of 7.2% in 2022 and forced the Riksbank to accelerate interest rate rises. Due to the delayed pass-through of the weakening in the krona exchange rate, inflation is expected to remain high this year (around 6.6%) before decelerating more consistently in 2024 (1.8% - EU Commission).
The country’s unemployment rate – at 7.6% in 2022 – returned to its pre-pandemic levels. Despite labour shortages in a wide range of sectors and the expected economic slowdown, the IMF sees the unemployment rate decreasing marginally in 2023 and 2024 (7.4% and 7.3%, respectively). Overall, Swedish citizens enjoy a high per capita GDP of USD 63,877 (PPP – 2022), 18.3% higher than the EU’s average (USD 53,960), and the European Anti-Poverty Network (EAPN) estimates that only 2% of Sweden’s population lives in serious material poverty conditions. Nominal wage growth, however, has been lagging behind inflation, resulting in a reduction of households’ real disposable income.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 547.05 | 636.86 | 585.94 | 599.05 | 615.49 |
| GDP (Constant Prices, Annual % Change) | -2.2 | 5.4 | 2.6 | -0.5 | 1.0 |
| GDP per Capita (USD) | 52,706 | 60,930 | 55,689 | 55,395 | 56,416 |
| General Government Balance (in % of GDP) | -1.7 | -0.3 | 0.1 | 0.4 | 0.3 |
| General Government Gross Debt (in % of GDP) | 39.5 | 36.3 | 31.7 | 32.3 | 32.9 |
| Inflation Rate (%) | 0.7 | 2.7 | 8.1 | 6.8 | 2.3 |
| Unemployment Rate (% of the Labour Force) | 8.5 | 8.8 | 7.5 | 7.8 | 8.0 |
| Current Account (billions USD) | 32.20 | 41.46 | 24.95 | 23.21 | 24.01 |
| Current Account (in % of GDP) | 5.9 | 6.5 | 4.3 | 3.9 | 3.9 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
