Government expects Sweden’s downturn to end in 2027

Sweden’s economic downturn is expected to end in 2027, according to a new government forecast, although the recovery in jobs has so far been cautious.

The forecast, published on Thursday, expects unemployment to decline during the second half of 2026 and in 2027. Finance Minister Elisabeth Svantesson said growth was strengthening while the labour market was expected to improve gradually.

The Finance Ministry says household consumption and investment strengthened during the first half of this year. It expects the recovery to continue, while acknowledging uncertainty affecting energy markets.

Inflation is expected to move towards the Riksbank’s 2 per cent target. The ministry attributes currently low inflation partly to underlying price pressures and temporary tax cuts.

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