Impact of Russia’s invasion of Ukraine will be limited for Sweden

We have lowered Sweden’s growth for this year to 3.1% from 3.6% previously due to the fallout from Russia’s invasion of Ukraine. The main channel will be from higher inflation, weighing on disposable incomes and private consumption. Input shortages, which had been easing until the invasion, are likely to worsen again, although Swedish trade with Russia and Ukraine had been minimal.

What you will learn:

• The outlook is subject to significant uncertainty, with downside risks dominating.
• The economy had a weak start to 2022 due to concerns around Omicron and mild restrictions.
• The labour market is historically tight with record vacancies, low lay-offs and upward pressure on wages.