SWEDEN, traditionally an agrarian economy, has now become one of the world’s most highly developed post-industrial and export-oriented economies.

The main industries include motor vehicles, telecommunications, pharmaceuticals, industrial machines, precision equipment, chemical goods, home goods and appliances, forestry, iron, and steel. About 90pc of all resources and companies are privately owned.

Only five per cent are owned by the state while another five per cent operate as either consumer or producer cooperatives. The country has achieved a high standard of living under a mixed system of high-tech capitalism and extensive welfare benefits.

The Swedish GDP growth rate was hampered by the 2008-2009 global financial crises, which affected overall performance during 2001-2012.

Sweden’s economy grew by a robust 3.3pc in 2016. Since inflation picked up slightly, these developments dampened real disposable income growth but domestic demand was the main growth driver in 2016.

GDP growth averaged 3.2pc in 2014-16. Over the last three years, the Swedish economy consistently ranked first among Nordic countries, thanks to strong domestic demand.

Today it has lowest levels of national debt among the EU, low and stable inflation, a healthy banking system and a diverse, highly competitive and successful economy.

The National Institute of Economic Research latest report reveals that Sweden’s economy is set to expand at a faster-rate this year but the pace will slow sharply next-year.

The Stockholm-based state-run think tank has revised its growth forecast based on second-quarter performance. The NIER now forecast more optimistic full-year growth at three per cent for 2017.

The Institute has also revised its GDP growth prediction for 2018 to 2.2pc. At the same time, the Swedish National Debt Office expects GDP growth at 2.3pc in 2017 and 2.1pc in 2018.

According to OECD, Sweden would have to fight to keep its solid performance on track during this year as global growth still remains weak.

Euler Hermes, on the other hand, reports that activity in 2017 is expected to be slightly slow due to less dynamic demand than in 2016. Private consumption will be affected by slower wage growth and the decline in unemployment.

Still private consumption could expand by 1.8pc in 2017 and 2.2pc in 2018 after slowing to 3.2pc in 2016. It forecasts GDP growth to further slowdown to 2.2pc in 2017 and 2.1pc in 2018. The central bank expects 2.8pc growth this year. The IMF sees growth to moderate to a still solid 2.4pc in 2017 against 3.4pc in 2016.

Employment grew strongly in 2016. The labour market continued to improve quite significantly in 2016 with employment growing by 1.7pc and the unemployment rate falling to 6.9pc.

There are good prospects for further employment growth in view of sustained economic growth. The unemployment-rate appears to stay broadly stable in 2017 and 2018 due to the expansion of the labour force. Unemployment was at 7.3pc in July which is expected to level out at 6.6per cent by end-2017.

The Swedish government has predicted that unemployment will drop to 5.9pc in 2018 and will continue to stay at 5.9pc in 2019 and 2020.

Central government debt is estimated at 30pc and 28pc of GDP respectively in 2017 and 2018.

Norway

NORWAY is one of the wealthiest countries in the world. It has a stable economy with a vibrant private sector, a large state sector, and an extensive social safety net.

The country has a very high standard of living compared with other European countries and a strongly integrated welfare system.

Norway’s modern manufacturing and welfare system rely on a financial reserve produced by exploitation of natural resources, particularly North Sea. The country is richly endowed with natural resources in addition to oil and gas, including hydropower, fish, forests, and minerals.

It is one of the top oil and gas producing nations in the world and is one of the world’s leading petroleum exporters. The petroleum sector

provides about nine per cent of jobs, 15pc of GDP, and 39pc of exports, according to official national estimates.

Norway has managed to translate economic growth into high and rising living standards. Its GDP per-capita is an estimated $70,450 in 2016.

After solid annual GDP growth averaging 7.5pc between 2006 and 2008, the economic growth contracted by 1.7pc in 2009 before returning to modest positive growth averaging 4.7pc per annum between 2010-14.

Euler Hermes reports a humble yearly growth of positive 0.9pc in 2016, the lowest in seven years.. Prospects are more positive for the next years. Norway should see a rebound in GDP growth to +1.5pc in 2017 and +1.8pc in 2018.

FocusEconomics Consensus Forecast panelists see total GDP increasing 1.4pc in 2017. For 2018, the panel expects the economy to expand 1.8pc.

The economy is projected to strengthen gradually owing to stronger growth of private consumption and both petroleum and non-oil investment. Employment growth will also pick up in years ahead.

The Central Bank expects total GDP to increase 1.0pc in 2017 and to expand 1.1pc in 2018.

The Norwegian unemployment rate has been low compared to other Scandinavian and European countries, in particular since the mid-1990s. The unemployment rate is seen falling to 4.5pc in 2017 and 3.8pc in 2018.

Oil prices have risen significantly from very low levels early in 2016, but the negative impulses from the petroleum sector continue to dominate.

Statistics Norway believes that growth will be slow and cautious in coming years. It is expected that a smaller drop in oil investments, low interest rates, expansionary fiscal policies and increased global growth will gradually accelerate growth in the Norwegian economy.

Published in Dawn, The Business and Finance Weekly, September 25th, 2017