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Swedish economic out look show more of a gloomy faces than otherwise. The Nordic tiger economy being tamed?
Wednesday, 20 June 2012
The Swedish economy is not performing well and various Swedish economic
analytical houses are giving their verdicts and recommendations.
The leading economic think tanks, National Institute of Economic
Research (NIER) in a report today have confirmed the picture that the
Swedish economy is decelerating sharply.
It points that the Swedish economy continues to retreat. The so-called
barometric indicator which gauges the economy fell by 1.7 units in June
to 98.7, according to NIER. It was the third consecutive month that the
indicator fell and is now below the historical average.
In the business sector, both the manufacturing and construction sectors
contributed negatively to weak outlook. Also consumer confidence in the
economy also fell, with the indicator dropping below the historical
average.
The Riksbank, the central bank and the finance minister, Anders Borg
are urged to should do more to counteract the weakening of the Swedish
economy, NIER writes, estimating that inflation will not reach the
target of 2 percent until 2016.
The economy is weakening and the euro crisis will take time to resolve
assesses NIER in the forecast. Due to the unexpectedly strong growth in
the first quarter, Sweden's GDP is forecast to increase by 0.7 percent
this year, compared with the previous forecast in March of 0.4 percent.
Next year, growth is predicted to land at 2.3 percent, compared with the earlier estimate of 2.5 percent.
NIER believes that the government "should consider" temporary stimulus
in the Budget of 2013 to keep down unemployment, which NIER tracks it
to increase modestly, to 7.6 percent next year from 7.5 percent on
average this year.
NIER predicts that the Riksbank should holds key interest rate
unchanged at 1.5 percent, up to early 2014, but believes that the bank
should be able to lower interest rates without jeopardizing the
inflation target.
By Scancomark.se Team
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