Sweden: 2006 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Sweden

IMF Staff Country Reports, February 7, 2007

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Canonical URL: Sweden: 2006 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Sweden

A broad-based economic upturn is under way in Sweden, spurred by strong global growth and supportive fiscal and monetary policies.
Private consumption has served as the engine of expansion, supported by resurgence in investment and buoyant exports.
The momentum of the current recovery is expected to continue, although to ease back in 2007–08 in the face of capacity constraints and fading policy stimulus.
Growth is also expected to ease back in 2007–08.

Drivers of the upturn:
- Strong global growth.
- Supportive fiscal policy.
- Supportive monetary policy.
- Private consumption as the primary engine of expansion.
- Resurgence in investment.
- Buoyant exports.
Near-term outlook:
- Recovery momentum expected to continue.
- Easing of momentum and growth anticipated in 2007–08 due to capacity constraints and fading policy stimulus.

Maintain awareness of capacity constraints as the recovery progresses.
Monitor fiscal and monetary policy stances given their supportive role and the potential need to withdraw stimulus to avoid overheating.

Subject: Employment, Fiscal policy, Fiscal stance, Inflation, Labor, Labor markets, Prices
Keywords: CR, Employment, exchange rate, fiscal policy fade, Fiscal stance, Global, government, government stake, government's reform, IMF staff estimate, Inflation, ISCR, Labor markets, potential GDP, Riksbank