Swedish Economy to Grow Driven by Investment and Consumption

Sweden's Gross Domestic Product (GDP) is forecast to grow by 2.6 percent in 2026 and 2.4 percent in 2027, adjusted for calendar effects. The growth rate is then expected to slow to 1.8 percent in 2028. The economic expansion is being fueled by ongoing investments in defense, AI expansion, energy, and infrastructure.

Household real wages are anticipated to increase by an average of 2.2 percent this year. Subsequently, the pace of growth is projected to decelerate to just over 1 percent annually between 2027 and 2028. This trend is expected to support domestic demand.

The labor market is anticipated to strengthen, with unemployment forecast to fall to approximately 7.5 percent by the end of 2028. This improvement in the employment situation is seen as a key factor in the economic outlook.

The Riksbank, Sweden's central bank, is expected to raise its policy rate in two steps, reaching 2.25 percent. These adjustments reflect expectations of economic growth and potential inflationary pressures.