Executive Summary – Page 1
Main Reports – Page 2
Appendices – Page 6
References – Page 9
Executive Summary page
The Current State of the Economy
( Overall: The Swedish economy experienced severe recession from 2008 due to global finance crisis. However, thanks to the active fiscal supports from the Swedish government and sound credits from consumers, Sweden is recovering relatively quickly from the recession. ( Export and import: Due to the recession, both imports and exports experienced sharp decline of negative 28 % respectively in 2009. However, Sweden gradually has recovered its exports up to 88% of 2008’s, as its main overseas markets’-OECD countries- economic climates got improved. Imports also have reached up to 89% of 2008’s. ( Active financial policies: During the recession, Swedish government aggressively defended its economy by dropping interest rates to stimulate the economy, which prevented Swedish economy from falling into long term recession.
The Challenges and the Prospects for Next Five Years
( The challenges: the nation’s unemployment rate hit over 9%. With all the Swedish authorities’ efforts, the unemployment rate may show little improvement. Short supply of houses is another issue. House price increased 10.74% during the first quarter of 2010, and this could make bubbles in real estate market later on. ( The prospects: Sweden is expected to overcome the global recession faster than others. The nation’s increasing exports on intermediate goods and automotive products would accelerate its economic recovery, as other parts of the world recover from the recession and start to make investments.
Recommendations for the Challenges
( Swedish government should consider lowering currency rate to stimulate exports and create more job opportunities. ( Increase productivity of manufacturing industry sectors. The productivity per labour unit of this sector is less efficient than other sectors.
The Current State of the Economy
( The effects of the global recession on Sweden
Like other countries, Sweden was hit hard by the global recession. Since Sweden was relying heavily on exports, the global downturn directly affected Sweden’s economy. According to HIS Global Insight statistics, Sweden’s FY 2009, in comparison to FY 2008, real GDP went down -5.1% and nominal GDP per capita was decreased by US$9,029. Especially Sweden’s main manufacturing and exporting industry products were intermediate goods, metals and heavy industrial vehicles such as truck.
( Struggle and recovery from the recession
Whilst the recession hit Sweden severely, Sweden is one of the recovering nations from the recession among EU countries. This is possible mainly because its improvement on exports and pre-emptive active financial policies prevent it from falling into deep recession.
According to HIS Global Insight statistics, both imports and exports experienced sharp decline (-28% respectively) in 2009. Especially in 2009, its exports to EU countries, where covering 58% of total Swedish exports, went down by US$ 33,454 mil. However, as an export-dependent nation, Sweden gradually has recovered its exports up to 88% of 2008’s, as its main overseas markets’-European countries-economic climates got improved. Imports also have reached up to 89% of 2008’s.
Concerning financial supports, the Swedish government actively defended its economy, i.e. increased its bank interest rates, expanding the public expenditures to stimulate demands. With all those measures, Swedish economy gradually went back to its normal position. According to the recent announcements from IMF and Swedish authorities, Sweden’s GDP growth has improved by 3.7% at the second quarter of 2010. Exports and imports are increased by 14%, 18% respectively. Also, the Bloomberg reported that over 80% of Swedish firms performed better than their expectations.
The Challenges and the Prospects for Next Five...
References: 1. GMID, Euromonitor International
2. HIS Global Insight
3. CIA, The World Factbook
4. IMF Country Info
5. KOTRA (Korea Trade-investment Promotion Agency), Countries Information
6. Global Window by KOTRA
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