IMF Executive Board Concludes 2025 Article IV Consultation with Sweden
IMF News, April 1, 2025
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- Published: April 1, 2025
Economic outlook
- Real GDP growth
- 2024: 1.0 percent
- 2025: 1.9 percent
- 2026: 2.2 percent
- Inflation
- Consumer price inflation (average)
- 2024: 2.0 percent
- 2025: 2.1 percent
- Consumer price inflation (end-of-period)
- 2024: 1.8 percent
- Inflation is expected to remain anchored around the 2 percent target over the forecast horizon.
- Labor market
- Unemployment rate
- 2024: 8.4 percent
- 2025: 8.2 percent
- 2026: 8.0 percent
- Outlook narrative
- After contracting in 2023, economic activity started to recover in 2024 (1 percent).
- Growth is expected to pick up in 2025 and 2026 on the back of policy support and converge to potential GDP growth (1½–1¾ percent) over the medium-term.
- Monetary policy has reached a neutral stance while fiscal policy is projected to be moderately expansionary amid subdued levels of private domestic demand and a still-negative output gap.
Risks and vulnerabilities
- Balance of risks to the growth outlook is tilted to the downside, including:
- Geoeconomic fragmentation, trade uncertainty, and escalating protectionism.
- Weakness in private consumption.
- Risks to inflation are double-sided.
- Financial sector
- The financial system is sound and buffers are robust, but vulnerabilities persist.
- Downside risks to financial stability have subsided somewhat.
- Elevated systemic risks from high household debt and large bank exposures to commercial real estate were highlighted.
Policy assessment and recommendations
- Fiscal policy
- Directors agreed the moderately expansionary fiscal stance envisioned in the 2025 budget is appropriate.
- Substantial available fiscal space allows for targeted policy support should downside risks materialize.
- Fiscal policy should prioritize measures to:
- Enhance growth and resilience.
- Facilitate the green transition.
- Further enhance inclusion.
- Noting rising fiscal pressures related to aging, climate change, and defense, Directors recommended broadening the coverage of the fiscal sustainability report to support policy formulation.
- Monetary policy
- Directors commended Riksbank’s effective and clearly communicated monetary policy response with price pressures broadly under control.
- The current neutral monetary policy stance remains appropriate.
- Recommended that monetary policy should remain agile and data dependent, given high uncertainty and double‑sided risks to inflation.
- Financial sector policy
- Directors encouraged authorities to remain vigilant and further strengthen regulatory and supervisory frameworks.
- Recommended maintaining Borrower‑Based‑Measures to preserve macro‑financial resilience.
- Encouraged reforms in housing, rental markets, and tax policy to address housing affordability challenges.
- Commended progress on implementing the 2023 FSAP recommendations and encouraged continued efforts to strengthen systemic risk assessment and analysis.
- Structural reforms
- Directors welcomed the authorities’ focus on raising labor productivity.
- Encouraged adoption of reforms to:
- Simplify regulations.
- Enhance education outcomes.
- Support labor mobility.
- Further deepen Research and Development.
- Measures to strengthen the EU single market and further efforts to achieve Sweden’s ambitious climate agenda are important.
Selected economic indicators (Table 1 highlights)
- Output
- Real GDP growth (percent)
- 2024: 1.0
- 2025: 1.9
- 2026: 2.2
- Employment
- Unemployment rate (percent)
- 2024: 8.4
- 2025: 8.2
- 2026: 8.0
- Prices
- Consumer price inflation (average, percent)
- 2024: 2.0
- 2025: 2.1
- Consumer price inflation (end-of-period, percent)
- 2024: 1.8
- Public Finances (General Government)
- Total revenue (percent of GDP)
- 2024: 47.6
- 2025: 47.7
- 2026: 47.5
- Total expenditure (percent of GDP)
- 2024: 49.3
- 2025: 49.1
- 2026: 48.2
- Net lending (percent of GDP)
- 2024: -1.7
- 2025: -1.4
- 2026: -0.7
- Structural balance (percent of potential GDP)
- 2024: -0.8
- 2025: -1.1
- 2026: -0.6
- Gross debt (percent of GDP)
- 2024: 32.6
- 2025: 33.7
- 2026: 33.9
- Money and Credit
- Broad money (M3) (percent change)
- 2024: 0.5
- 2025: …
- Bank lending to households
- 2024: 0.8
- 2025: 4.0
- 2026: 4.2
- Repo rate/Central Bank rate
- 2024: 2.8
- Balance of Payments
- Current account (percent of GDP)
- 2024: 7.4
- 2025: 6.8
- 2026: 6.0
- FDI (percent of GDP)
- 2024: 1.5
- 2025: 2.6
- 2026: 2.5
- Reserves (months imports): (not reported in table)
- Exchange Rate (period average): (not reported in table)
- REER ("-" depreciation in percent)
- 2024: -1.5
Press Release No. 25/083, April 1, 2025 — IMF Executive Board Concludes 2025 Article IV Consultation with Sweden
