Swedish outlook lowered for 2023, with growth to stall in winter

We have kept our growth forecast for Sweden in 2022 largely unchanged but lowered it for next year to 1.6% from 2.1%, as we expect growth this winter to stall. The economy faces an adverse mix of record-high inflation and monetary policy tightening, which increases debt servicing costs and weighs on asset prices. Meanwhile, Europe likely faces gas rationing this winter. That said, the outlook is subject to significant uncertainty.

What you will learn:

• The economy got off to a weak start in 2022 due to the Omicron Covid variant.
• GDP contracted by 0.8% q/q in Q1, although growth in previous quarters was revised up.
• The labour market is the one bright spot, with high vacancies, low layoffs, and upward pressure on wages.