(Bloomberg) -- Sweden’s Finance Ministry lowered its forecast for the pace of an economic rebound through 2026, citing a protracted weakness in the largest Nordic economy and increased global uncertainty.
Gross domestic product is seen expanding 2.2% next year on a calendar-adjusted basis, compared with the September forecast of 2.8%, the ministry said in a website statement on Wednesday. The expansion is still expected to accelerate in 2026 to 2.7%, but that’s less than the 2.9% seen earlier.
The change comes on the heels of mixed data about the outlook for the export-led economy that has been nearly stagnant for about three years. The GDP outcome for October indicated a surprise contraction, contrasting with third-quarter figures showing an unexpected expansion.
“Sweden is in a continuing downturn, but it is financially strong and our potential for recovery in 2025 and 2026 is fundamentally good,” Finance Minister Elisabeth Svantesson said in the statement. “However, the development is uncertain and both the geopolitical and geoeconomic risks have increased during the autumn. Swedish exports could develop weaker than expected if demand from Sweden’s most important trading partners is lower than expected.”
The ministry said the rebound would mainly be powered by improving household consumption, helped by lower credit costs and higher purchasing power, while it would take time for housing construction to improve. Some of the downward revision can still be explained by higher output seen this year, with forecast for calendar-adjusted growth nudged up to 0.9% from 0.6%.
Its forecast compares with the Riksbank’s projections of 2.1% gain in 2025 and 2.3% growth in 2026, published in September. The central bank is expected to publish new estimates on Thursday when it announces a decision on interest rates.
--With assistance from Christopher Jungstedt.
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