The Swedish economy will shrink more in 2023 than previously expected, according to official data released on Monday.
Gross domestic product (GDP) is now forecast to contract by 1%, compared to the 0.7% contraction predicted by the Finance Ministry in December. Unemployment in the Nordic region’s largest economy is projected to jump to 7.9% this year.
“We are in a very challenging economic environment,” Finance Minister Elisabeth Svantesson stated. “Many people are struggling to make ends meet, so it is important for the government to fight inflation and support those in the most difficult circumstances.”
The Swedish government announced at the end of 2022 that the country was entering a recession that would last until 2025.
Economists say Sweden is suffering one of the worst economic downturns in its modern history, with inflation at a 30-year high and continued interest rate hikes by the central bank.
The nation has also been facing its biggest fall in housing prices in three decades, which has led to a reduction in investment in new homes.
The latest data shows that bankruptcies in Sweden soared for the seventh consecutive month in February, amid declining household consumption and growing pressure on construction companies from a housing-market crunch.
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