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Sweden downgrades GDP forecast

Sweden downgrades GDP forecast

The Swedish government on Friday made hefty downgrades to the country's economic growth forecasts, citing continued troubles on the world's financial markets.
Sweden's gross domestic product is estimated to grow 1.5 percent in 2008 and 1.3 percent in 2009, Finance Minister Anders Borg said in a statement.
The previous guidance indicated a growth of 2.1 percent this year and 1.8 percent the year after.
Unemployment forecasts were bumped up to 6 percent in 2008 and 6.4 percent in 2009, compared with previous estimates of 5.9 percent and 5.7 percent.
"The dark clouds that have shadowed the world economy during the summer have thickened," Borg said.
"Statistics show that the Swedish economy is more clearly slowing down and that forecasts for consumption, investment and export developments have weakened. This results in the government adjusting the growth prospects downward, while the forecast for unemployment is upgraded somewhat," Borg said.
Despite the downgrades, Borg said the country's public finances have improved thanks to reduced unemployment numbers and will therefore allow more room for reforms and savings when the government presents its 2009 budget proposals on Sept. 22.
Borg said more tax cuts will be introduced for businesses and households, and that more resources will be focused on health care, infrastructure, education and climate research.
The government plans to propose measures worth 30 billion kronor (US$4.7 billion) in 2009, he said.
"The size and focus of the measures the government will present in the autumn budget will help soften the economic downturn and reduce the effects on the labor market," he said.


Updated : 2021-04-20 09:59 GMT+08:00