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FINANCIAL CRISIS

Is it time for Sweden to brace for an economic downturn?

With growth faltering nationally, and the prospect of hard Brexit and a global trade war on the horizon, is it time for Sweden to start getting ready for an economic downturn?

Is it time for Sweden to brace for an economic downturn?
Experts believe the trigger for a downturn in Sweden is likely to come from overseas. Photo: Fredrik Sandberg/TT
Ylva Hedén Westerdahl, head of forecasting at the National Institute of Economic Research, said Swedes should not think today's good times will continue forever. 
 
While external shocks like Brexit or a trade war will only hit exporters directly, indirectly they could push down house prices, destabilize financial institutions, make salary growth stagnate and cause rising unemployment. 
 
“When house prices fall, then house-owners start to feel poorer and so they cut their consumption and start to save more,” she told the TT news agency.
 
 
Another big worry for the property market is whether the large numbers of newly built houses shortly to come onto the market will be sold. 
 
“The question is how they are going to be sold,” Westerdahl said. “Overproduction means that housing investments and prices could fall even more.”
 
But banks are not as exposed to mortgages as they were in the run up to the 2007 and 2008 financial crisis. 
 
 

Ylva Hedén Westerdahl. Photo: Anders Wiklund/TT
 
John Hassler, Professor of Economics at Stockholm University's Institute for International Economic Studies, argues that households in Sweden are not generally financially overstretched. 
 
A bigger worry, he said, was commercial property owners, some of  whom could go bankrupt in a downturn. 
 
“That's the part of the loan portfolio which is a little more uncertain,” he said. 
 
If that leads to a confidence crisis in the housing sector, banks could star pulling in lending to households and other investment projects, he warned. 
 
“The blood flow in the system might ground to a halt and that's very serious.” 
 
 
If the crisis is serious enough to push any of the banks into a crisis, then that could hit the entire economy seriously, forcing the national government to come to the rescue and guarantee some banks' borrowing. 
 
Luckily, he said, Sweden's cautious fiscal policy over the past 20-25 years had left it with considerable firepower to bail out banks in the event of a crisis. 
 
“If we had the same debt levels as France or Italy we would have been toasted.”
 
 
Most economists see Sweden's next economic downturn as coming from external factors, such as a financial crisis in Sweden, a crisis in the Eurozone, or a trade war between the US and China. 
 
The first industry segments to be hit will be big exporters such as Scania and Swedish steel giant SSAB. 
 
How much their troubled hit the wider Swedish market depends on how willing they are to hold onto their staff despite drops in sales, Hassler said. 
 
“They were willing to do that during the [2007] finance crisis but not during the 1990s economic crisis, when companies realized they weren't competitive enough,” he said. 
 
If there are mass layoffs, he said, the weakest members of the workforce would be the worst affected. 
 
“It has been tough for those with a low level of edcuation or a foreign background to get a job even during an economic boom, and for them a downturn would of course be much worse.”

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MONEY

How to avoid falling victim to tax scams in Sweden

Sweden's tax agency, Skatteverket, warns of an increase in scams when it's time for Swedish tax-payers to declare their taxes.

How to avoid falling victim to tax scams in Sweden

Anyone who earned more than 22,208 kronor last year received their tax returns digitally last week, marking the start of tax season.

That also means an expected peak in tax-related scams, Skatteverket warns.

Most of the scams are so-called phishing scams, meaning attempts to steal the victims’ personal information. Fraudsters may for example email a person, pretending to represent Skatteverket, and ask them for, among other things, their banking details.

“We’re seeing these in all channels. They use fake emails, SMS, letters and in some cases even phone calls. It is particularly common in tax declaration times – just when we’re about to send out the tax returns, the e-service opens and it’s possible to declare – but above all when it’s time for tax rebates,” Jan Janowski, a Skatteverket expert, told Swedish news agency TT.

A scam email might for example state that you’re entitled to a tax rebate and that you should click a link to receive it. Don’t click any links, open any attachments or reply to the message. Skatteverket advises that you immediately delete the email or text message.

Another common scam is that you receive a text message claiming to be from Skatteverket, telling you that you owe them money and you need to log in to calculate the amount. The website you’re urged to log in via does not belong to Skatteverket. Don’t click the link.

The agency stresses that it never asks people for their banking details. The exception is that you may be asked for your bank account information if you log into Skatteverket’s website to declare your taxes, but that always first requires you to log into the site.

To receive your tax rebate, you need to inform Skatteverket of your bank account number. You do this not by clicking a link in an email or SMS, but by logging into their website using a digital ID, for example BankID, and submitting your details. Only do this on your own initiative. If someone calls you and asks you to log in with your BankID during the phone call, don’t do it. That’s another common scam.

Skatteverket will also never call you to ask for your bank account or credit card number.

It will be possible to declare your taxes from March 19th. You’ll receive any tax rebate you’re owed by mid-April or early June, depending on when you submit your tax return. These are the dates when fraudsters are likely to attempt the most scams.

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