Stockholm GDP likely to stagnate this year
We have upgraded our forecasts for the Stockholm economy in 2023 as a result of a stronger than expected national outturn in the early part of 2023. However, the economic outlook for the Swedish capital is still far from positive as high inflation, rising interest rates and a downturn in the housing market continue to hit disposable incomes, and consumer spending. As a result, we expect GDP gains to be limited this year with the economy expanding by 0.1%.
What you will learn:
- The Stockholm housing market has undergone a correction following the surge in prices during the pandemic. Since Q2 2022, prices have fallen sharply in the Swedish capital, with the city of Malmö the only other region in Sweden to record a steeper fall.
- The resilience in the labour market remains one of the bright spots for the Stockholm economy in the short-term. The number of job vacancies in Stockholm remains reasonably high by historical standards and so far the unemployment rate has not picked up significantly despite the economic challenges facing the city.
- As the current pressures abate from 2024 onwards, we expect GDP growth in the Swedish capital to pick up pace and return more in line with previous trends. As a result, the medium-term outlook for Stockholm remains positive, with the city’s increasingly important ICT sector, which is now the fourth largest in Europe, fuelling economic expansion.
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