Sweden: Domestic demand strong
After posting very strong growth in 2006, the Swedish economy cooled during 2007, due mainly to weaker export growth. Domestic demand is expected to continue to grow markedly in the near term as strong employment growth and income gains should boost private consumption.
Inflation is set to continue rising, as tight labour market conditions might gradually fuel wage growth. The central bank should continue moderate tightening of monetary policy, and expansionary fiscal policy should be avoided.
No. 264/265, December 2007-January 2008
• OECD Economic Outlook No. 82, December 2007
• Visit www.oecd.org/sweden
• All OECD Observer articles on Sweden