Could the Swedes have found the light in the dark abyss that the western countries plummeted into after the financial crisis in 2008?
Graph shows the changes in GDP since 2007
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| Source: Government Offices of Sweden |
Last week Sweden’s Statistical Bureau posted last year’s quarterly GDP growth figures and to everyone’s surprise it was much stronger than what experts had predicted. A record growth of 7.3 % was achieved and it has never been that high since recording began in the ‘70s. The huge rise is partially explained as a recoil from the severe dip the Swedish economy took in 2009. But I think those are still some amazing growth figures from a developed western economy and that makes me proud to be Swedish (despite not living there for 3 years now).
Recovery already reached
Has the country up in the cold north found the way out of slumped growth and persistent unemployment? Maybe the world could learn a thing or two from this remote part of the world where the Viking once came from.
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| Anders Borg Source: sverigesradio.se |
In a year, Sweden has already recovered the GDP drop and is now heading with full force into 2011. By looking at the graph above one can see this very clearly: Sweden is the blue line, the Euro area is red, and the US is demarcated in green. Experts predict the growth of the year to be over 4% with the finance minister Borg optimistically predicting 4.8% growth. It is expected that the unemployment rate will drop to around 5% in the next 3 years. Having an export-oriented and open market to the world is can be seen as a drawback and it makes us much more vulnerable to the changes in the world economy; sharper drops, but steeper climbs which we can clearly see now. Despite the view by many of Sweden as the totem of socialism, our country has a liberal-oriented market. We have a more liberal market than Germany and Belgium and we’re one of the few that actually became even more liberal during the financial crisis, when so many others turned to protection. The truth is that Sweden was, and almost always had, a liberal market.
How many other countries in Europe can report their budget’s heading into a surplus? Even the state review agency had concerns about the forthcoming predicted surpluses in the coming years. They wanted to know what the government had planned to do with it! How many other countries have this problem? Possibly China, but not many others I would say.
Well done Sweden. The British government has been copying the Swedish education system and fictional Swedish detectives have also gone down well with British readers. Sounds like we should start learning something from your economy too.
ReplyDeleteNice reading about Sweden, since I am also Swedish. I would say Sweden has Anders Borg to thank for the growth or in other words he is doing a great job. The central bank has due to the growth chosen to raise the key interest rate, the repo rate. Due to the significant growth and strong SEK, inflation is notable and was 1.5% in March. However, inflation is expected to rise as the economy strengthens further and the Swedes are worried that interest rate will rise to much and that the house prices will also start to fall.
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