EU nation cuts growth outlook for 2023

Soaring inflation is expected to put the brakes on the Swedish economy

Swedish authorities have slashed the country’s economic growth outlook for next year citing rising inflation, Finance Minister Mikael Damberg said on Thursday.

Stockholm increased its projection for economic growth to 2.3% in 2022 from a June prediction of 1.9%, but cut the outlook for next year to 0.4% from 1.1%.

“We are approaching tougher times and a low growth phase,” Damberg told journalists, having warned of a sharp slowdown during the second half of 2022.

The minister added that making priorities and handling fiscal policy responsibly would be necessary, as high inflation is commonly combined with rising unemployment.

The government expects inflation to hit 7.3% in 2022 and 3.9% next year versus the previous projections of 6.1% and 2.9%, respectively.

Earlier this month, Statistics Sweden reported that in July inflation in the country unexpectedly eased after five months of accelerating. Consumer prices climbed 8.5% year-on-year, slower than the 8.7% rise in the previous month, which was the highest since July 1991.