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Swedes upbeat about the economy: poll

Swedes have become more positive about the country’s economic development, as well as developments in their own pocketbooks, according to a new study.

Published: 20 October 2009 15:52 CEST

According to the study, which was carried out by Svenskt Kvalitetsindex (SKI), Swedes are considerably more optimistic about the economy during the third quarter than during the previous quarter this year.

SKI regularly measures how Swedes appraise their own economic situation, as well as that of the country as a whole, for the year ahead. The results are then converted into an index ranging from 0 to 100.

Measurements for the third quarter 2009 resulted in a confidence index reading of 47.4 for the economy in general, while people’s appraisal of their own economic situation resulted in a score of 47.1.

The results of SKI’s latest survey indicate that many now believe that the economic crisis has stabilized and that things are set to take a turn for the better.

“We’re back to the levels from before the financial crisis and the economic slowdown,” said SKI’s Johan Parmler to the TT news agency.

Readings for the index in the spring of 2007 included a score of 46.6 for the economy in general and 52.1 for respondents’ personal situations.

Also noteworthy is the fact that respondents’ confidence in the Swedish economy equals their optimism regarding their own economic situations.

“It’s nice that you can believe as much in your neighbour’s economic situation as in your own. That’s not very common. Normally, people’s assessments of their own financial situation are much higher than their assessments of the economy in general,” said Parmler.

Swedes are significantly more positive in their assessments of where the country’s and their own economy is heading, according to the survey.

The study is based on responses to roughly 25,000 interviews carried out by EDB Business Partners.

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How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year.

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’, Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn.

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment?

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024 about 1 percent below the estimated structural level.

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending?

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”. The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”.

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025.

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023.

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write.

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers.

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.”

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