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2021 forecast: Vaccination progress will determine Sweden’s economic outlook

The Swedish economy has withstood the second wave of the pandemic better than the first, said the country's Central Bank as it released its new forecast for the interest rate.

2021 forecast: Vaccination progress will determine Sweden's economic outlook
Sweden's interest rate is expected to remain at zero until 2024. Photo: Izabelle Nordfjell/TT

The Riksbank warned that the pandemic was still having an impact on the economy and that much uncertainty about the future remained, adding that service industries were under “severe pressure” due to low consumption.

“Overall, however, the economy has been more resilient to the second wave of the pandemic than to the first. Vaccinations are now under way. As soon as the spread of infection decreases and restrictions are lifted, households are expected to return to more normal patterns of consumption, which will create favourable conditions for a rise in demand,” it said in its latest monetary report, released on Wednesday morning.

But it also said that the extent of the crisis meant that it would likely take until 2023 before the Swedish inflation rate permanently reaches the bank's target of two percent.

“Economic developments in 2021 will be largely determined by how quickly and effectively vaccinations reduce the pandemic,” it added.

The Riksbank said it would continue to purchase assets within the 700 billion kronor framework as previously decided, and hold the country's key interest rate, the repo, at zero percent. It predicted that the repo rate would remain at zero until 2024.

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The bank took the landmark decision to slash the rate below zero in February 2015, hoping that the strategy would boost inflation to raise the price of everyday goods and services which had been stagnant, and therefore improve the Nordic nation's economic prospects. Almost five years later, it was raised from -0.25 to zero in December 2019.

Sweden's GDP is expected to grow 3.0 percent this year, which is higher than the bank's previous forecast of 2.6 percent, released in November, and 3.9 percent next year (lower compared to the previous forecast of 5.0 percent). Unemployment is expected to land at 8.5 percent this year, down from the previous forecast of 9.4 percent.

More than 300,000 people in Sweden have received the first dose of the coronavirus vaccine, but Swedish officials warned on Wednesday that distribution issues may cause vaccinations to be delayed.

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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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