{
  "title": "Public Information Notice: IMF Executive Board Concludes 2011 Article IV Consultation with Sweden",
  "publication": "IMF News, July 13, 2011",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1188",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1188",
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  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2011-07-13",
  "sections": [
    {
      "heading": "Background",
      "content": "- On July 8, 2011, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Sweden.\n- Recovery and macro developments:\n  - 2010 output rose by 5½ percent, with exports, investment, and consumption all rising rapidly.\n  - Unemployment has come down to 7¾ percent, from its mid-crisis peak of over 9 percent.\n  - Core inflation has remained close to target throughout.\n  - Financial sector strains have been contained; bank capital and liquidity have strengthened; most emergency stabilization measures have been withdrawn.\n  - Fiscal deficit narrowed to 0.3 percent of GDP in 2010; public debt remains at about 40 percent of GDP and is expected to fall.\n  - Monetary tightening since July 2010: Riksbank raised the policy rate by 1¾ percentage points.\n  - Since its trough in mid-2009, the krona has appreciated by 20 percent against the euro.\n  - Growth momentum maintained into 2011 with first quarter GDP rising by 6½ percent year-on-year.\n- Remaining concerns:\n  - Long-term and youth unemployment have lagged the recovery.\n  - Fixed investment, although rising, remains below 2006–08 levels relative to output.\n  - Risk of a decline in house prices in coming years with potential adverse impact on growth."
    },
    {
      "heading": "Executive Board Assessment — Findings and Judgments",
      "content": "- Commendations and overall judgment:\n  - Directors commended Sweden’s impressive recovery and noted economic growth in 2010 was uniquely strong among advanced countries.\n  - Performance reflects decisive domestic policies underpinned by sound policy frameworks.\n- Monetary and financial sector assessment:\n  - Welcomed the measured exit from policy stimulus; increases in the Riksbank policy rate confirm commitment to low inflation.\n  - Withdrawal of many financial sector support measures alongside enhanced capital ratios has strengthened sector resilience.\n  - Return to fiscal surpluses has reinforced strong sovereign credentials.\n- Risks and vulnerabilities:\n  - Youth and long-term unemployment lagging the recovery.\n  - Fixed investment remains below pre-crisis level relative to GDP.\n  - House prices still appear richly valued in the context of elevated household indebtedness despite a recent dip.\n  - External risks remain, especially from ongoing stresses in the euro area.\n- Fiscal policy view:\n  - Commended 2011 budget balance between supporting activity (maintaining a neutral stance given the remaining output gap) and building fiscal buffers against external uncertainties.\n  - Welcomed increased margins relative to spending ceilings and postponement of planned tax reductions.\n  - If scope for reductions in 2012 exists, focus should be on the earned income tax credit to strengthen labor market performance.\n  - Welcomed the role of the Fiscal Policy Council as an effective watchdog; emphasized ensuring the Council remains adequately resourced.\n- Labor market and structural policy:\n  - Continued moderation in wage settlements would help secure sustained reduction in unemployment.\n  - Encouraged further structural efforts and adoption of permanent concessionary arrangements for labor market entrants.\n- Monetary policy guidance:\n  - Anticipated further increases in the Riksbank policy rate were considered appropriate.\n  - Authorities should stand ready to respond flexibly: raise rates more rapidly if wage settlements accelerate and delay somewhat if strong krona appreciation continues.\n- Financial stability and macroprudential policy:\n  - Welcomed FSAP update findings indicating initial reassurance on credit risks.\n  - Called for continued supervisory vigilance given potential vulnerabilities from house prices.\n  - Authorities should be prepared to take further macro prudential measures if significant new financial stability or consumer risks develop.\n  - Welcomed recent measures to strengthen monitoring of liquidity and plans for early introduction of strong liquidity regulations taking specific account of risks in foreign currencies.\n  - Supported authorities’ intention to go faster and further than Basel III capital regulations given unique characteristics and risks of the Swedish financial system.\n- Institutional recommendations (endorsed FSAP recommendations):\n  - Merge the stability and deposit insurance funds.\n  - Establish a special bank resolution regime.\n  - Increase the Financial Supervisory Agency’s capacity.\n  - Improve coordination among institutions responsible for macro prudential policies."
    },
    {
      "heading": "Key Statistics (Selected Economic and Social Indicators, 2005–12)",
      "content": "- Real economy (in percent change)\n  - Real GDP: 2005: 3.2; 2006: 4.3; 2007: 3.3; 2008: -0.6; 2009: -5.3; 2010: 5.5; 2011: 4.4; 2012: 3.8\n  - Domestic Demand: 2005: 3.0; 2006: 3.9; 2007: 4.7; 2008: 0.0; 2009: -4.9; 2010: 6.1; 2011: 2.9\n  - CPI inflation: 2005: 0.8; 2006: 1.5; 2007: 1.7; 2008: 2.0; 2009: 1.9; 2010: 2.5\n  - Unemployment rate (in percent): 2005: 7.6; 2006: 7.0; 2007: 6.2; 2008: 8.3; 2009: 8.4; 2010: 7.4; 2011: 6.6\n  - Gross national saving (percent of GDP): 2005: 24.5; 2006: 27.2; 2007: 29.6; 2008: 28.9; 2009: 23.4; 2010: 25.0; 2011: 26.0; 2012: 27.0\n  - Gross domestic investment (percent of GDP): 2005: 17.7; 2006: 18.7; 2007: 20.3; 2008: 20.2; 2009: 16.3; 2010: 18.5; 2011: 20.0; 2012: 21.4\n  - Output Gap (as a percent of potential): 2005: 4.2; 2006: 5.6; 2007: 5.4; 2008: -5.9; 2009: -3.1; 2010: -1.6; 2011: -0.9\n- Public finance (in percent of GDP)\n  - Total Revenues: 2005: 53.8; 2006: 53.0; 2007: 52.5; 2008: 51.9; 2009: 52.1; 2010: 50.7; 2011: 49.3; 2012: 48.6\n  - Total Expenditures: 2005: 51.8; 2006: 50.8; 2007: 46.1; 2008: 46.6; 2009: 49.7; 2010: 47.8; 2011: 45.2; 2012: 44.2\n  - Overall balance: 2005: 2.2; 2006: 3.6; 2007: -0.3; 2008: 1.3\n  - Structural balance (as a percent of potential GDP) 1/: 2005: 1.0; 2006: 0.9; 2007: 1.4; 2008: 1.2\n  - General government gross debt, official statistics: 2005: 50.4; 2006: 45.3; 2007: 40.2; 2008: 38.8; 2009: 42.8; 2010: 39.8; 2011: 36.1; 2012: 32.7\n  - Gross public debt, Maastricht criterion: 2005: 50.2; 2006: 45.0; 2007: 40.0; 2008: 38.3; 2009: 42.1; 2010: …\n- Money and credit (12-month, percent change)\n  - M1: 2005: 9.4; 2006: 11.1; 2007: 9.9; 2008: 4.9; 2009: 8.0; 2010: 7.1\n  - M3: 2005: 7.5; 2006: 10.6; 2007: 12.5; 2008: 10.4; 2009: 8.2; 2010: 4.5\n  - Credit to non-bank public: 2005: 10.8; 2006: 11.2; 2007: 14.3; 2008: 7.7\n- Interest rates (year average)\n  - Repo rate: 2005: 4.0; 2006: 0.3\n  - Three-month treasury bill rate: 2005: 2.3; 2006: 3.5; 2007: 0.4; 2008: 0.5\n  - Ten-year government bond yield: 2005: 3.4; 2006: 3.7\n- Balance of payments (in percent of GDP)\n  - Current account: 2005: 6.8; 2006: 9.2; 2007: 8.7; 2008: 6.3; 2009: 6.0; 2010: 5.7\n  - Trade balance: 2005: 7.2; 2006: 7.8; 2007: 5.8\n  - Foreign Direct Investment, net: 2005: -4.5; 2006: 0.7; 2007: -2.3; 2008: -5.2; 2009: -2.1\n- International reserves (in billions of US dollars)\n  - 2005: 26.4; 2006: 29.7; 2007: 35.4; 2008: 53.9; 2009: 55.8\n  - Reserve cover (months of imports of goods and services): 2005: 2.1; 2006: 1.8\n- Exchange rate (period average, unless otherwise stated)\n  - Exchange rate regime: Free Floating Exchange Rate\n  - Skr per U.S. dollar (June 1, 2011): 6.15\n  - Nominal effective rate (2000=100): 2005: 99.2; 2006: 99.5; 2007: 101.3; 2008: 90.7; 2009: 97.8\n  - Real effective rate (2000=100) 2/: 2005: 84.4; 2006: 80.2; 2007: 84.2; 2008: 80.0; 2009: 81.8\n- Fund Position (April 30, 2011)\n  - Holdings of currency (in percent of quota): 74.51\n  - Holdings of SDRs (in percent of allocation): 100.74\n  - Quota (in millions of SDRs): 2395.50\n- Social Indicators (reference year)\n  - GDP per capita (in current PPP US dollars, 2009): 35,805\n  - Income Distribution (ratio of income received by top and bottom quintiles, 2005): 3.3\n  - Life expectancy at birth (2009): 79.3 (males) and 83.3 (female)\n  - Automobile ownership (2004): 456 per thousand\n  - CO2 Emissions (tonnes per capita, 2007): 5.4\n  - Population Density (inhabitants per sq. km., 2008): 22\n  - Poverty Rate (share of the population below the established risk-of-poverty line, 2005): 9%\n\nPublic Information Notice (PIN) No. 11/88; July 13, 2011 — IMF External Relations Department\n\n---\n\n Content in this bundle\n\n- Country Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Sweden and the IMF\n- Public Information Notices\n- Adobe Acrobat Reader\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1188"
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    "Published: July 13, 2011",
    "On July 8, 2011, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Sweden.",
    "Recovery and macro developments:",
    "Remaining concerns:",
    "Commendations and overall judgment:",
    "Monetary and financial sector assessment:",
    "Risks and vulnerabilities:",
    "Fiscal policy view:",
    "Labor market and structural policy:",
    "Monetary policy guidance:",
    "Financial stability and macroprudential policy:",
    "Institutional recommendations (endorsed FSAP recommendations):",
    "Real economy (in percent change)",
    "Public finance (in percent of GDP)",
    "Money and credit (12-month, percent change)",
    "Interest rates (year average)",
    "Balance of payments (in percent of GDP)",
    "International reserves (in billions of US dollars)",
    "Exchange rate (period average, unless otherwise stated)",
    "Fund Position (April 30, 2011)",
    "Social Indicators (reference year)",
    "[Country Report (PDF)](/external/pubs/ft/scr/2011/cr11171.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[Sweden and the IMF](http://www.imf.org/external/country/SWE/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[Adobe Acrobat Reader](https://www.imf.org/adobe)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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