Reforms Oriented Growth
Sweden enjoys lowest levels of national debt, low and stable inflation and a healthy banking system in European Union. There was a time when Swedish economy used to suffer from low growth and high inflation, and the Swedish Krona was repeatedly devalued. In early 90s, Sweden was also hit by a serious financial crisis. Banks became unstable and two were nationalized, unemployment rose rapidly, government spending got out of control and so did Swedens national debt. The road back to stability and success was not easy
for Sweden. But by pursuing inventive and courageous reforms and sticking to them, Sweden has transformed its economy and stayed strong in the face of the new global recession.
A Dynamic Economy
Sweden today has a diverse, highly competitive and successful economy. The World Economic Forum ranks Sweden the 6th most competitive country in the world. Sweden is also the sixth easiest country in the world to trade with, according to the World Bank. This is unsurprising, since a key feature of the Swedish economy is its openness and liberal approach to trade. Sweden is an export-orientated nation that has a large trade surplus and exports a variety of goods. In addition to maintaining competitiveness in goods and manufacturing, growth in modern service sectors such as information and communication technology has been strong in Sweden. Internet calling service Skype and online music streaming service Spotify are two examples, but Swedes havent stopped there. Since 2008 the ICT sector has grown by 16% and now employs over 4% of the Swedish workforce. The sector is characterized by its many new and small businesses, and Stockholm has become known as one of Europes hottest start-up cities for ICT companies. Although Stockholm is the hub of Swedish economic activity, it is far from being the only successful region. In fact, wealth in Sweden is more evenly distributed
across regions than anywhere else in the EU. Remarkably, Sweden is the only EU country where each and every region has a higher GDP per capita than the EU average. So dynamic economies and high standards of living are
found across the country. Swedens present economic and social prosperity was built on the lessons learned from the financial crisis in the early 1990s. Governments pursued reforms and fiscal sustainability became institutionalized. Stable economic policies combine with competitiveness, innovation and an open approach to trade to make Sweden a model for economic success.
Since the crisis of the 1990s, successive Swedish governments have been balancing the budget for over a decade, and have continued to do so even in the wake of the 20072008 global financial crisis. How is this possible? Sweden reinvented its economic governance with a series of innovative regulations. First, in 1996 a ceiling for government expenditures (utgiftstak) was introduced. This was accompanied by the addition of the surplus goal (verskottsmlet) for the government budget. These reforms have met with broad support from across the political spectrum in Sweden. They help ensure that high debt doesnt accumulate and that debt isnt passed on to future generations.