In November the stock of lending to households by monetary and financial institutions amounted to SKr 3,279 billion, up SKr 222 billion on November 2014. Mortgage lending increased by SKr 200 billion to SKr 2,673 billion, reports Statistics Sweden.
“200 billion sounds like a huge amount and it is true that in krona and öre we have never been so indebted. Debt has also grown more than disposable income. But the other side of the coin is that if you compare debts to assets, including residential assets, the debt ratio has in fact decreased in recent years,” says SEB economist Jens Magnusson.
Earlier this month Saab launched a campaign to sell the Gripen fighter jet to India. CEO Håkan Buskhe was in New Delhi, along with Ulf Nilsson, the head of Saab’s aeronautics division.
This is no small deal we are talking about, comments Svenska Dagbladet. While Sweden has ordered 60 new Gripen E fighters, Brazil 36 and the Czech Republic has just signed an agreement on an upgrade of its 14 fighters (ed), India is probably looking at buying 200. This would certainly boost Saab’s sales, but the company could also lose some control over the fighter jet’s future development to India, according to journalist Tomas Augustsson, who also points out that the process is likely to be long and complicated, and may come to nothing. “And until then, what happens in smaller, neighbouring countries, on their way to acquiring new fighter jets, is more important,” he writes.
Sweden faces a number of challenges, one of which is its ageing population. Other challenges include the housing shortage and immigrant integration, writes Jens Spendrup, chair of the Confederation of Swedish Enterprise in a debate article in business daily Dagens Industri.
Public finances will come under strain in the next few years, but tax hikes are not the way forward, he argues. The fact that there are large and unexplained differences in the cost of public services around Sweden shows that there are significant efficiency gains to be made.
Above all, the Sweden’s business environment must improve so that more people dare set up companies, develop their ideas and recruit staff. Measures such as lower starting salaries and simple jobs that could be introduced, making it easier for companies to employ people and for the jobless to find work, Spendrup suggests
The fast-growing US car-sharing service Uberpop is facing major challenges from both the taxi industry and the Swedish authorities over the legality of its business operations in Sweden.
However, Alok Alström, Uberpop’s new head of Swedish operations, is dismissive of the criticism, saying the current regulations need to be updated, and replaced by technology neutral regulations that address emergent technology and promote competitiveness.
Uber has closed down its Uberpop service in France and Germany after protests and battles with the authorities, but there are no such plans for Sweden, according to Alström.
Partly state-owned TeliaSonera took the first step in its plan to divest its controversial operations in Eurasia by selling its 60% shareholding in Nepal’s Ncell to Malaysia’s telecoms group Axiata.
“The timing is good, it’s a sound valuation and a good buyer,” said Telia chief executive Johan Dennelind, who foresees scope for other potential buyers of Telia’s Eurasian holdings.
The government has decided to task the Financial Supervisory Authority (FSA) to map and analyse how the Swedish financial sector can contribute more effectively towards achieving the goal of sustainable development
The government has even said in recent talks with the sector that it would be prepared to legislate if there is need for such a step.
“In the case of the fund market, France has already introduced a law obliging financial institutions to report their carbon footprint. I hope the industry will see the need for this before we need to legislate,” says Per Bolund, financial markets minister.
Despite the refugee crisis, the Swedish government will not breach the expenditure ceiling in 2016, writes Finance Minister Magdalena Andersson in Dagens Industri today.
So as not to hit the ceiling, the government will curb spending by some SKr 8 billion. A number of planned investments will be postponed, such as the purchase of high conservation value forests. Furthermore, some SKr 11 billion in expenditure, which includes Sweden’s contribution to the EU, development assistance and a number of other allowances, will be brought forward to 2015.
In a new report, the Organisation for Economic Co-operation and Development (OECD) finds that the Swedish labour market functions better than most others. However, the job security gap is widening between permanent employees and fixed-term employees, which is why the organisation recommends that Sweden relax its employment laws.
The OECD also recommends that Sweden invest in more training for the least skilled, and ensure that unemployment insurance is designed to cover all workers.
Sweden’s central bank, the Riksbank, has kept its benchmark interest rate, the repo rate, at a record low of -0.35 per cent, but says it is ready to do more if needed. Market reaction was muted yesterday although the Swedish krona strengthened against the euro.
In a press release, the Riksbank said it had upwardly revised its forecast for GDP growth to 3.7 per cent this year and 3.6 per cent in 2016, as a result of strong economic activity.
However, the housing market is “out of balance” and it is of the utmost importance that the measures are taken to create a better balance between supply and demand, and reduce the incentives for households to take on debt, the bank said (ed.).
Residential construction in Sweden is both expensive and inefficient, finds a government-commissioned report to be presented today. The main problem is that building regulations vary considerably between local authorities. Another problem is the lack of competition due to the length of time companies have to wait before receiving planning permission.
The authors of the report say a government directive would be needed in order for the local authorities to prioritise housing over other interests, such as energy consumption.