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Sweden's economy staring at ‘grim winter’, warns finance minister

Tuesday, 01 November 2022 11:21 AM [ Last Update: Tuesday, 01 November 2022 11:25 AM ]

Sweden's newly-appointed Finance Minister Elisabeth Svantesson has warned of a “grim winter” as the country heads into recession.

Sweden is projected to fall into recession next year as unemployment rates are on the rise and the country’s gross domestic product (GDP) is likely to stagnate, the country’s new finance minister has warned.

“The Swedish economy is heading towards a rather grim winter. We don't know how cold and grim it will be yet,” Elisabeth Svantesson said.

She warned that the country will continue to face a tough economic situation next year as unemployment is expected to rise to 6.5 percent in 2023.

“Getting rid of inflation is not the main task of fiscal policy, but it is important for us not to exacerbate the inflation that exists now,” Svantesson stressed.

The newly-appointed finance minister warned that many of her countrymen will continue to experience tough economic times next year.

According to the government’s forecast, the Swedish economy will enter recession with a GDP falling by 0.4 percent next year, while inflation will rise to almost 6 percent, the highest in two decades.

Meanwhile, Sweden bank, one of the Nordic country's largest banks, predicted that the GDP will decrease by 1.1 percent in the next year while inflation will reach 7.4 percent.

Swedbank described the economic development for households as “the worst since the 1990s”.

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In a recent survey, more than half of Swedes viewed their future as gloomy and dire due to economic problems. Almost 70 percent of people were concerned that Swedish companies would have serious problems, while 60 percent were worried about the rise in unemployment.

A recent report by the National Institute of Economic and Social Research reported that Swedish households' expectations for the next year have reached record levels of pessimism.

Sweden's economy is facing hard times due to the impact of EU sanctions against Russia in the wake of the Ukraine war, which has made energy and cost-of-living crises in European countries worse ahead of winter.

With the price of cheaper goods rising and reaching double digits, inflation also reached an unprecedented 9.7 percent in September, the highest in the past few decades.

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