Exceptionally expansionary monetary policy and the refugee influx are fuelling the Swedish economy but concealing weak underlying growth potential, according to Mats Kinnwall, chief economist at the Swedish Association of Industrial Employers (Industriarbetsgivarna).
Kinnwall, who is also chief economist at the Swedish Forest Industries Federation (Skogsindustrierna), says low interest rates have fuelled investment into property but other forms of investment are necessary in order to raise growth potential.
“We need a new internet, we need a regime shift,” he adds, noting that global productivity growth is weak
Nordic operator Telia Company has divested its entire holding in Russia’s Megafon to Gazprombank for around SEK 8.6 billion. The transaction is in line with the company’s strategy to focus on the Nordics and the Baltics. The intention is to use the funds to make acquisitions on the operator’s home markets.
According to the latest data from Statistics Sweden and the Swedish National Mediation Office, average earnings have grown by 2.6% year-on-year. Government-targeted staff nurse and teacher pay rises have contributed to the growth in average earnings, but analysts are also seeing signs of rising overall wage pressure.
The Swedish Association of Local Authorities and Regions (SALAR) has set ambitious targets to clamp down on staffing agency costs in the health service. Despite this, costs continue to soar. In 2016, locum staff cost the authorities SEK 4.6 billion, an increase of SEK 2 billion on 2011.
A rise in the retirement rate, combined with a growing need for care and a tougher working environment, has left the health service struggling to find staff. “Many of our members have found themselves in a situation where they have had no other option but to hire agency staff,” SALAR head Hans Karlsson says.
Via Skype, US Secretary of Commerce Wilbur Ross participated in a lunch with the Swedish-American Chamber of Commerce in New York on Tuesday. The US is Sweden’s most important trade partner outside the EU, and Wilbur Ross says he is prepared to resume the paused TTIP negotiations.
Sweden’s Minister for Enterprise Mikael Damberg also participated in the lunch and will meet Wilbur Ross today, Thursday. He does not share Wilbur Ross’s views of TTIP but says, “even if we have different views, it is important for us in the government to develop a relationship with this American administration”.
Wilbur Ross points out the major trade deficit – last year Sweden sold SEK 87 billion worth of goods and services to the US but imported only SEK 37 billion worth – although says, “We share many of our values with Sweden and have huge respect for the technical knowledge in the country.”
In a report based on new data from Statistics Sweden, which is presented today, the Liberals have looked at how the next recession will affect the most vulnerable on the Swedish labour market.
Writing in Dagens Industri (DI), economic spokesperson for the Liberals, Mats Persson, states that those who are currently unemployed come from two main groups: people born outside of Sweden and those who do not have an upper-secondary school education. The situation is particularly serious for foreign-born women; almost 30 per cent of women born outside of Europe of working age have no job.
The new report shows that in the past three recessions in Sweden since 1990, the employment rate among both groups has fallen by nine percentage points, which is around 250,000 people. Mats Persson writes, “A labour market that does not work for these groups during an economic boom is a labour market that knocks out many during a recession.” Political courage is needed to push through reforms for a labour market on which everyone is necessary.
Minister for Health and Social Affairs Annika Strandhäll (S) is aiming to table a proposition to raise the pension age next year. “I am not ruling out a proposal before the coming election,” says Annika Strandhäll.
The changes being discussed include raising the earliest pension age from 61 to 63. Additionally, employers will not be able to give someone notice before 69 years of age.
It is roughly one year since Vattenfall sold its four brown coal power plants and four open cast mines in Germany. The state power company was criticised in Germany for shrugging of its environmental and employment responsibilities and in Sweden for selling when brown coal was at its cheapest.
The company is working to abolish coal-powered energy by 2030. German Vattenfall is to invest over EUR 2 billion, around SEK 19 billion over the coming five years. “That is with growth within renewable energy and customer business, growth in distribution of power, gas and heating and redesign of our production park for heating,” says Tuomo Hatakka, head of Vattenfall GmbH, which is counting on the German government continuing to realign to greener energy. (
The UK is one of Sweden’s largest trade partners and if Britain were to leave the EU without a trade deal, Sweden would be badly hit. In the absence of a deal, the UK would be required to follow World Trade Organisation rules on tariffs, making future trade more expensive.
On Thursday the Swedish government therefore ordered the National Board of Trade (Kommerskollegium) to prepare Sweden’s priorities ahead of Brexit trade talks.
Both Brussels and London have been talking of a “no deal” Brexit recently but Social Democratic EU Affairs and Trade Minister Ann Linde says Sweden has not given up hope of an agreement.
The Christian Democrats (CD) have joined forces with the Moderates, calling for change in the Employment Protection Act (LAS). Talking to Dagens Industri (DI), party leader Ebba Busch Thor says: “It is obvious that there needs to be a major reform of LAS, which as it stands is doing more harm than good”.
Alliance cooperation has intensified since Ulf Kristersson was elected the new Moderate leader, and ventures to provide the electorate with a credible government alternative are increasing, she tells the newspaper.