Economical overview
Sweden has an export-oriented, high-tech and
well-diversified economy, which is considered one of the
world's most competitive. Wood, iron ore and
hydroelectric power laid the foundation for a robust
economy that has since been developed to include
information technology, in addition to a large service
sector. Government finances have been a guiding
principle for economic policy.
Until the 1870s, most Swedes lived in a poor farming
community. Extensive industrialization and an open trade
climate meant that exports of goods subsequently grew
rapidly. Today, the economy is dominated by the service
sector.
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The Social Democrats who dominated for most of the
second half of the 20th century had the goal of
achieving full employment and high welfare levels
combined with high growth and reduced income inequality.
Above all, to ensure welfare, the public sector was
expanded with the help of tax funds, which has meant
that the overall Swedish tax burden is one of the
highest in the world. It is this policy that has been
called "the Swedish model". The bourgeois government
that governed the Commons did not depart from the model
(see below).
Good economic growth in the first decades after the
Second World War slowed in the 1970s. A first crisis
occurred in the middle of the decade, with rising oil
prices and rising labor costs. Many jobs in the industry
disappeared while the public sector grew, as did the
budget deficit.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SW which represents the country of Sweden.
State economic crisis
Around 1990, fundamental weaknesses in the economy
could no longer be tackled, and the greatest decline
since the 1930s began. The bourgeois government in
1991–1994 was forced to experience three years of
negative growth, which created massive deficits in the
state budget. However, the government was able to
initiate privatization of business enterprises and
state-owned companies, and the crisis began to subside
in 1994, after the currency, the krona, had to fall in
value.
From the mid-1990s, comprehensive austerity measures
were implemented with the aim of creating a budget
balance and breaking the trend of growing government
debt. The decontamination of the economy led to lower
interest rates and increased real wages thanks to low
inflation. The powerful measures helped to accelerate
growth again. Strong expansion among telecommunications
and information technology companies and a rapidly
rising stock exchange took off.
After the turn of the millennium, an international
recession followed and the so-called IT bubble burst.
Many overvalued computer companies went bankrupt and
unemployment increased. Despite the problems, economic
growth was just under 2 percent these years, which was
higher than in many other countries.
A strong upturn in the global economy began in 2004.
The government again promised increased grants and some
tax cuts, including delayed tax on inheritance and
gifts. But the large number of sick leave, early
retirement and unemployed was a heavy burden on the
state's finances. Nevertheless, the economic upturn
continued to be strong and a certain brightening in the
labor market was evident.
Earned income tax credit
The upturn was reinforced when the bourgeois
government from 2006 began to implement its program with
reduced income taxes for employees and stricter rules
for beneficiaries and lower unemployment benefit. The
government also initiated sales of state-owned
companies.
The economy went strong until it almost collapsed
when the international financial crisis became a reality
in the autumn of 2008. The forecast hail, not least in
the engineering industry. Unemployment soared,
investment fell and interest rates reached record lows.
Growth was negative, GDP fell by 5 percent in 2009. The
government long resisted demands for stimulus measures,
but eventually presented increased government grants to
the municipalities and more labor market policy
initiatives. Soon the curves turned upwards and growth
in 2010 was as good as it was bad the year before.
Sweden was one of the countries that survived the crisis
best. A contributing factor was the tight fiscal policy
that has been in place since the 1990s decontamination,
and the budget surplus that existed before the crisis.
The bourgeois government elected in 2010 continued to
focus on reforming the labor market and gaining control
of government spending. However, it lacked its own
majority in the Riksdag and suffered an early defeat
when the opposition put its wheels in the wheels for
continued sale of state-owned companies. Continued
inertia in the global economy and, not least, the crisis
in the eurozone also contributed to slowing growth.
Still, per capita growth, as well as efficiency and
productivity, continued to be stronger in Sweden than
generally in Western Europe and the United States.
Despite the major slowdown in 2009, growth between 2005
and 2015 averaged 1.8 percent. The debt ratio, that is,
government debt as a share of GDP, has more than halved
since the 1990s.
Foreign trade
Sweden, which has a small home market, is extremely
dependent on trade with the outside world. Exports are
normally larger than imports. Traditional export goods
such as wood, pulp, iron and steel are now joined by,
among others, electronics and telecommunications
equipment.
Almost half of GDP consists of exports of goods and
services, compared with just over a quarter in 1992. The
majority of all products manufactured are exported.
The current account balance, which also includes
trade in services and transfers and return on capital,
has shown surpluses since the mid-1990s after many years
of deficits. Exports of services account for almost one
third of total exports.
Trade mainly takes place with the EU and especially
with Germany and the neighboring countries in the Nordic
countries (including Norway, which is not an EU member).
Exchanges with the United States and countries in Asia
have grown rapidly in recent years.
FACTS - FINANCE
GDP per person
US $ 54 112 (2018)
Total GDP
US $ 551,032 M (2018)
GDP growth
2.4 percent (2018)
Agriculture's share of GDP
1.0 percent (2018)
Manufacturing industry's share of GDP
13.8 percent (2018)
The service sector's share of GDP
64.8 percent (2018)
Inflation
1.7 percent (2019)
Government debt's share of GDP
38.5 percent (2018)
Currency
1 krona = 100 cent
Merchandise exports
US $ 178,313 million (2018)
Imports
US $ 169,648 million (2018)
Current account
US $ 9,458 million (2018)
Commodity trade's share of GDP
61 percent (2018)
Main export goods
machinery and vehicles, pharmaceuticals and
chemicals, electronics and telecommunications equipment,
minerals, paper and wood
Largest trading partner
Germany, Norway, Denmark, Netherlands, USA, Finland
2007
November
The State Secretary resigns
Fredrik Reinfeldt's state secretary Ulrica Schenström
resigns since her questioning has been questioned. She
has been drinking alcohol in a restaurant and reportedly
been intoxicated, and kissed a political reporter from
TV4, despite having on-call responsibility for the
government's emergency preparedness.
September
New FP leader
Lars Leijonborg who has lost support within his party
FP resigns as party leader and education minister. He is
succeeded on both posts by Jan Björklund.
The Minister of Defense resigns
Mikael Odenberg is protesting against major cuts in
defense appropriations. He is succeeded by Minister of
Commerce Sten Tolgfors. Ewa Björling is appointed new
Minister of Commerce.
July
New tax deduction for household services
The rut deduction is introduced, a right to tax
deductions for individuals for so-called household
services ("rut" stands for cleaning, maintenance and
washing).
March
New S-conductor
Mona Sahlin is elected party leader at the Social
Democrats party congress.
January
Tax cuts are implemented
The first step in the so-called job tax deduction is
introduced, one of the most important election promises
of the bourgeois alliance. This means reduced tax on
income from work or business. The fee for the a-cash is
raised, in many cases substantially. The rules for
compensation from the unemployment insurance fund also
change in several respects. The wealth tax is removed.
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