Sweden: Financial Considerations
by Going Global
Sweden has recovered nicely from the global economic downturn, with Gross Domestic Product (GDP) at 5.3 percent – down only slightly from last year’s 5.7 percent – one of the best showings in Europe. At 6.6 percent, Sweden’s low unemployment rate is far below the 10 percent average jobless rate experienced by the EU countries. In addition to this favorable economic picture, the Swedish government is not experiencing the financial debt crisis of euro zone (EZ) currency countries like Greece, Portugal, Italy and Ireland, as well as the US.
Although a powerful member of the European Union (EU), Sweden does not use the euro (EUR) as currency. The monetary unit in Sweden is the krona, or plural kronor (SEK). While Sweden is not part of the EZ, its financial strength is influenced by the economic stability of its global trading partners, including the EZ. In fact, the European and US sovereign debt crisis has caused extreme fluctuation in world currencies. While the US dollar and the euro have declined, the Swedish krona has strengthened, making it relatively more expensive for many expatriates living in Sweden.
Prices are on the rise in Sweden, as the cost of commodities, particularly food and energy, increases worldwide. Riksbank, the national bank of Sweden, reports consumer price inflation is running around 3.4 percent annually, mostly due to increased housing, fuel and food costs. This is above the annual target rate of 2.0 percent. However, inflation is expected to slow to around 2.1 percent through 2012 and 2.6 percent in 2013.