{ "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Sweden", "publication": "IMF News, March 27, 2019", "sourceUrl": "https://www.imf.org/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation", "canonical": "https://www.imf.org/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation", "overlayPath": "/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/index.md", "summary": "Growth averaged 2.4 percent in 2016–18.", "publishDate": "2019-03-27", "sections": [ { "heading": "Recent performance and near‑term outlook", "content": "- Growth averaged 2.4 percent in 2016–18.\n- Current account surplus halved to 2 percent of GDP in 2018.\n- Real GDP projected to slow to 1.2 percent in 2019 due to lower global growth and weaker domestic demand.\n- Housing investment is expected to fall after a 6 percent housing price decline in late 2017; housing prices have since stabilized.\n- Household credit growth eased to 5.3 percent y/y in 2018.\n- Lower growth in 2019 implies the fiscal surplus will likely be below the budget estimate of 0.9 percent of GDP.\n- Public debt reported as moderate at 38 percent of GDP." }, { "heading": "Inflation and monetary policy", "content": "- Headline inflation around the 2 percent target rate in 2017-18, partly reflecting rising energy prices.\n- Core CPIF inflation remained below target at an average rate of 1.5 percent in 2018, broadly unchanged from 2016.\n- Wage rises subdued at 2.6 percent in 2018.\n- The Riksbank deferred its first interest rate increase until late 2018, raising the repo rate by 25 basis points to -0.25 percent.\n- The Swedish krona depreciated 4.3 percent in effective terms in 2018.\n- The Riksbank stated that the next repo rate increase will likely be in the second half of 2019, provided the economic outlook and inflation prospects develop as it expects.\n- Executive Directors: monetary policy should remain cautious and data‑dependent to ensure inflation remains close to target and inflation expectations are firmly anchored." }, { "heading": "Labor market and inclusiveness", "content": "- Strong job creation reduced unemployment to a post‑crisis low of 6.2 percent.\n- Directors commended employment gains but noted unemployment among the foreign‑born and low‑skilled remains high.\n- Directors welcomed the social partners’ plan for “entry agreements” to enable migrants and the low‑skilled to combine work and training at reduced cost to employers.\n- Directors encouraged the social partners to update wage formation to reflect structural changes, for example by broadening sectors that set the benchmark for wage rises." }, { "heading": "Fiscal policy and public finances", "content": "- Directors welcomed the authorities’ intention to allow automatic fiscal stabilizers to operate fully in 2019.\n- Directors supported reducing the cyclically‑adjusted surplus to the new medium‑term target by 2020, given little risk of overheating from the resulting small stimulus amid slowing growth.\n- Several Directors noted higher public investment needs arising from demographic shifts or other factors could be addressed by shifts in the budget.\n- Consideration of a temporary cut in the medium‑term surplus target would need to be balanced with preserving its credibility." }, { "heading": "Housing, financial stability, and macroprudential measures", "content": "- Directors encouraged comprehensive housing market reforms to improve housing affordability, supporting labor market mobility and inclusive growth.\n- Policy measures with merit, according to Directors:\n - Liberalizing rents for newly‑built apartments.\n - Phasing out rent controls, while cushioning adjustment by expanding access to the housing allowance.\n - Promoting efficient use of existing property via higher recurrent property taxes, including by phasing out mortgage interest deductibility.\n - Strengthening competition in the construction sector to lower construction costs.\n- Directors welcomed adoption of stricter mortgage amortization requirements and called for continued close monitoring of risks.\n- Recommended actions:\n - Collect household level balance sheet data.\n - Continue review of banks’ commercial property risk management and the health of commercial property borrowers." }, { "heading": "Financial integrity and payments innovation", "content": "- Directors emphasized continued work to correct remaining deficiencies in Sweden’s AML/CFT framework and to strengthen regional cooperation.\n- Directors welcomed the authorities’ exploration of the e‑Krona and encouraged assessment of:\n - Potential economic implications of the digital currency.\n - Regulatory options to ensure reliable and efficient private payments." }, { "heading": "Key indicators (selected figures from Table 1)", "content": "- Real GDP: 2016 = 2.7; 2017 = 2.1; 2018 = 2.3; 2019 (projection) = 1.2; 2020 = 1.8; 2021 = 1.9; 2022 = 2.0.\n- Domestic demand (percent change): 2016 = 3.2; 2017 = 1.1.\n- Private consumption (percent change): 2016 = 2.9; 2017 = 2.2; 2018 = 1.7.\n- Public consumption (percent change): 2016 = 3.6; 2017 = 0.0; 2018 = 0.9; 2019 = 1.3; 2020 = 1.0.\n- Gross fixed investment (percent change): 2016 = 4.2; 2017 = 6.0; 2018 = 3.3; 2019 = 3.0.\n- Net exports (contribution to growth): 2016 = -0.4; 2017 = -0.5; 2018 = 0.4; 2019 = -0.1; 2020 = 0.1.\n- Exports of G&S (percent change): 2016 = 3.5; 2017 = 2.5; 2018 = 2.8.\n- Imports of G&S (percent change): 2016 = 4.3; 2017 = 4.8.\n- HICP inflation (e.o.p): 2016 = 1.4.\n- HICP core inflation (e.o.p): 2016 = 1.6; 2017 = 1.5.\n- Unemployment rate (percent): 2016 = 6.9; 2017 = 6.7; 2018 = 6.3; 2019 = 6.4; 2020 = 6.5; 2021 = 6.6.\n- Gross national saving (percent of GDP): 2016 = 28.3; 2017 = 28.4; 2018 = 28.5; 2019 = 28.8; 2020 = 29.0; 2021 = 29.4; 2022 = 29.7; 2023 = 30.0.\n- Gross domestic investment (percent of GDP): 2016 = 24.5; 2017 = 25.6; 2018 = 26.3; 2019 = 26.1; 2020 = 26.5; 2021 = 26.7; 2022 = 26.9; 2023 = 27.1.\n- Output gap (percent of potential): 2016 = 0.5; 2017 = 0.3.\n- Total revenues (percent of GDP): 2016 = 49.9; 2017 = 49.5; 2018 = 49.4; 2019 = 49.3; 2020 = 49.1.\n- Total expenditures (percent of GDP): 2016 = 48.8; 2017 = 48.4; 2018 = 48.7; 2019 = 49.0.\n- Net lending (percent of GDP): 2016 = 0.8.\n- Structural balance (as a percent of potential GDP): 2016 = 0.7.\n- General government gross debt, official statistics (percent of GDP): 2016 = 42.4; 2017 = 40.8; 2018 = 39.0; 2019 = 37.2; 2020 = 35.5; 2021 = 33.9; 2022 = 32.3; 2023 = 30.9.\n- M3 (year‑on‑year, percent change, eop): 2016 = 7.5; 2017 = 8.0; 2018 = 5.9.\n- Bank lending to households (year‑on‑year, percent change, eop): 2016 = 7.1; 2017 = 6.8; 2018 = 5.3.\n- Repo rate (percent, end of period): 2018 = -0.25.\n- Current account (percent of GDP): 2016 = 3.8; 2017 = 2.4; 2018 = 2.6.\n- Foreign direct investment, net (percent of GDP): 2016 = -2.6; 2017 = 0.2; 2018 = 0.6.\n- International reserves, changes (in billions of US dollars): 2017 = -1.1.\n- Net international investment position: 2016 = 4.4; 2017 = 7.6; 2018 = 8.4; 2019 = 9.1; 2020 = 10.0; 2021 = 10.8; 2022 = 11.7.\n- SEK per euro (period average): 2016 = 9.5; 2017 = 9.7; 2018 = 10.3; 2019 (data as of February) = 10.5.\n- SEK per U.S. dollar (period average): 2016 = 8.6; 2017 = 8.5; 2018 = 8.7.\n- Nominal effective rate (2010=100): 2016 = 97.1; 2017 = 96.2; 2018 = 91.5.\n- Real effective rate (2010=100) (based on relative unit labor costs in manufacturing): 2016 = 94.5; 2017 = 93.7; 2018 = 89.4.\n- Fund position (December 31, 2018) — Quota (in millions of SDRs): 4,430.\n- Holdings of SDRs (in percent of allocation): 98.5.\n- Other indicators: GDP per capita (2017, USD): 52,925; Population (2017, million): 10.1.\n\nSource: IMF Executive Board Concludes 2019 Article IV Consultation with Sweden (March 27, 2019).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Sweden and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Fund position (December 31, 2018)\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/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation" } ], "bullets": [ "[Markdown version](/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/index.md)", "[Structured JSON version](/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/index.json)", "[Bundle manifest](/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/bundle-manifest.json)", "Published: March 27, 2019", "Growth averaged 2.4 percent in 2016–18.", "Current account surplus halved to 2 percent of GDP in 2018.", "Real GDP projected to slow to 1.2 percent in 2019 due to lower global growth and weaker domestic demand.", "Housing investment is expected to fall after a 6 percent housing price decline in late 2017; housing prices have since stabilized.", "Household credit growth eased to 5.3 percent y/y in 2018.", "Lower growth in 2019 implies the fiscal surplus will likely be below the budget estimate of 0.9 percent of GDP.", "Public debt reported as moderate at 38 percent of GDP.", "Headline inflation around the 2 percent target rate in 2017-18, partly reflecting rising energy prices.", "Core CPIF inflation remained below target at an average rate of 1.5 percent in 2018, broadly unchanged from 2016.", "Wage rises subdued at 2.6 percent in 2018.", "The Riksbank deferred its first interest rate increase until late 2018, raising the repo rate by 25 basis points to -0.25 percent.", "The Swedish krona depreciated 4.3 percent in effective terms in 2018.", "The Riksbank stated that the next repo rate increase will likely be in the second half of 2019, provided the economic outlook and inflation prospects develop as it expects.", "Executive Directors: monetary policy should remain cautious and data‑dependent to ensure inflation remains close to target and inflation expectations are firmly anchored.", "Strong job creation reduced unemployment to a post‑crisis low of 6.2 percent.", "Directors commended employment gains but noted unemployment among the foreign‑born and low‑skilled remains high.", "Directors welcomed the social partners’ plan for “entry agreements” to enable migrants and the low‑skilled to combine work and training at reduced cost to employers.", "Directors encouraged the social partners to update wage formation to reflect structural changes, for example by broadening sectors that set the benchmark for wage rises.", "Directors welcomed the authorities’ intention to allow automatic fiscal stabilizers to operate fully in 2019.", "Directors supported reducing the cyclically‑adjusted surplus to the new medium‑term target by 2020, given little risk of overheating from the resulting small stimulus amid slowing growth.", "Several Directors noted higher public investment needs arising from demographic shifts or other factors could be addressed by shifts in the budget.", "Consideration of a temporary cut in the medium‑term surplus target would need to be balanced with preserving its credibility.", "Directors encouraged comprehensive housing market reforms to improve housing affordability, supporting labor market mobility and inclusive growth.", "Policy measures with merit, according to Directors:", "Directors welcomed adoption of stricter mortgage amortization requirements and called for continued close monitoring of risks.", "Recommended actions:", "Directors emphasized continued work to correct remaining deficiencies in Sweden’s AML/CFT framework and to strengthen regional cooperation.", "Directors welcomed the authorities’ exploration of the e‑Krona and encouraged assessment of:", "Real GDP: 2016 = 2.7; 2017 = 2.1; 2018 = 2.3; 2019 (projection) = 1.2; 2020 = 1.8; 2021 = 1.9; 2022 = 2.0.", "Domestic demand (percent change): 2016 = 3.2; 2017 = 1.1.", "Private consumption (percent change): 2016 = 2.9; 2017 = 2.2; 2018 = 1.7.", "Public consumption (percent change): 2016 = 3.6; 2017 = 0.0; 2018 = 0.9; 2019 = 1.3; 2020 = 1.0.", "Gross fixed investment (percent change): 2016 = 4.2; 2017 = 6.0; 2018 = 3.3; 2019 = 3.0.", "Net exports (contribution to growth): 2016 = -0.4; 2017 = -0.5; 2018 = 0.4; 2019 = -0.1; 2020 = 0.1.", "Exports of G&S (percent change): 2016 = 3.5; 2017 = 2.5; 2018 = 2.8.", "Imports of G&S (percent change): 2016 = 4.3; 2017 = 4.8.", "HICP inflation (e.o.p): 2016 = 1.4.", "HICP core inflation (e.o.p): 2016 = 1.6; 2017 = 1.5.", "Unemployment rate (percent): 2016 = 6.9; 2017 = 6.7; 2018 = 6.3; 2019 = 6.4; 2020 = 6.5; 2021 = 6.6.", "Gross national saving (percent of GDP): 2016 = 28.3; 2017 = 28.4; 2018 = 28.5; 2019 = 28.8; 2020 = 29.0; 2021 = 29.4; 2022 = 29.7; 2023 = 30.0.", "Gross domestic investment (percent of GDP): 2016 = 24.5; 2017 = 25.6; 2018 = 26.3; 2019 = 26.1; 2020 = 26.5; 2021 = 26.7; 2022 = 26.9; 2023 = 27.1.", "Output gap (percent of potential): 2016 = 0.5; 2017 = 0.3.", "Total revenues (percent of GDP): 2016 = 49.9; 2017 = 49.5; 2018 = 49.4; 2019 = 49.3; 2020 = 49.1.", "Total expenditures (percent of GDP): 2016 = 48.8; 2017 = 48.4; 2018 = 48.7; 2019 = 49.0.", "Net lending (percent of GDP): 2016 = 0.8.", "Structural balance (as a percent of potential GDP): 2016 = 0.7.", "General government gross debt, official statistics (percent of GDP): 2016 = 42.4; 2017 = 40.8; 2018 = 39.0; 2019 = 37.2; 2020 = 35.5; 2021 = 33.9; 2022 = 32.3; 2023 = 30.9.", "M3 (year‑on‑year, percent change, eop): 2016 = 7.5; 2017 = 8.0; 2018 = 5.9.", "Bank lending to households (year‑on‑year, percent change, eop): 2016 = 7.1; 2017 = 6.8; 2018 = 5.3.", "Repo rate (percent, end of period): 2018 = -0.25.", "Current account (percent of GDP): 2016 = 3.8; 2017 = 2.4; 2018 = 2.6.", "Foreign direct investment, net (percent of GDP): 2016 = -2.6; 2017 = 0.2; 2018 = 0.6.", "International reserves, changes (in billions of US dollars): 2017 = -1.1.", "Net international investment position: 2016 = 4.4; 2017 = 7.6; 2018 = 8.4; 2019 = 9.1; 2020 = 10.0; 2021 = 10.8; 2022 = 11.7.", "SEK per euro (period average): 2016 = 9.5; 2017 = 9.7; 2018 = 10.3; 2019 (data as of February) = 10.5.", "SEK per U.S. dollar (period average): 2016 = 8.6; 2017 = 8.5; 2018 = 8.7.", "Nominal effective rate (2010=100): 2016 = 97.1; 2017 = 96.2; 2018 = 91.5.", "Real effective rate (2010=100) (based on relative unit labor costs in manufacturing): 2016 = 94.5; 2017 = 93.7; 2018 = 89.4.", "Fund position (December 31, 2018) — Quota (in millions of SDRs): 4,430.", "Holdings of SDRs (in percent of allocation): 98.5.", "Other indicators: GDP per capita (2017, USD): 52,925; Population (2017, million): 10.1.", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Sweden and the IMF](http://www.imf.org/external/country/SWE/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[Fund position (December 31, 2018)](http://www.imf.org/external/np/fin/tad/exfin2.aspx?date1key=2013-04-12&memberKey1=910)", "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/index.md", "json": "/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/index.json", "bundleManifest": "/en/news/articles/2019/03/26/pr1994-sweden-imf-executive-board-concludes-2019-article-iv-consultation/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T22:37:12.233Z" }