Sweden's Government Bumps Up Growth Forecasts as Election Nears

(Bloomberg) -- With the general election just three weeks away, Sweden’s Social Democratic government on Thursday kicked off its traditional planning meeting by raising the economic growth forecast.

The economy is “chugging along well,” Finance Minister Magdalena Andersson said at Harpsund, south of Stockholm, while warning of “big risks” to the economy, in particular from a “certain Twitter account.”

A marginal increase was expected with data lately showing unexpected strength in the economy, now into its longest expansion since at the least the early 1980s. According to preliminary data, the economy barreled ahead by an annual 3.3 percent in the second quarter, exceeding 3 percent for a second straight period.

The minister as recently as June lowered its forecast for this year and next, pointing to a possible slowdown in world trade and Swedish construction.

201820192020
GDP2.9%  (2.6%)2.1% (2.1%)2.1% (2.1%)
Budget Balance1.0% (0.7%)1.0% (0.9%)1.2% (1.1%)
Unemployment6.2% (6.2%)6.2% (6.2%)6.1% (6.1%)
Repo Rate-0.5% (-0.5%)-0.3% (-0.1%)0.3% (0.4%)

The government is “well-armed” to tackle the next downturn now and will continue to invest, she said. There’s about 25 billion kronor available for reforms next year, according to Andersson.

Still, the Social Democrats could be heading for a historic defeat. If polls are confirmed in the Sept. 9 election, the party would post its worst result on record. Surveys also suggest that neither of the traditional political blocs will achieve a majority in parliament, with the nationalist Sweden Democrats emerging as a power broker.

©2018 Bloomberg L.P.