The Swedish Ministry of Finance updated its economic outlook, forecasting that the country’s economic downturn will end in 2027 as growth strengthens, inflation remains low and labor market conditions gradually improve. Unemployment is expected to begin falling in the second half of 2026 and continue declining in 2027, although geopolitical tensions and their effects on energy markets remain a source of uncertainty. Economic activity grew strongly in the first half of 2026, supported by rising household consumption and continued business and public sector investment. Inflation has remained low despite high energy prices, partly because of low core inflation and temporary tax cuts, and is expected to move toward the Riksbank’s 2% target.
Swedish Ministry of Finance forecasts end of economic downturn in 2027 as recovery strengthens
The Swedish Ministry of Finance expects the economic downturn to end in 2027 as growth strengthens and unemployment begins to decline. Inflation remains low despite high energy prices and is forecast to move toward the Riksbank’s 2% target.