Sweden Avoided the Worst, Financial Future Looking Bright

November 19, 2009 Updated: October 1, 2015

UP AND UP: Swedish Finance Minister Anders Borg (C) giving a press conference at EU headquarters in Brussels. Sweden has escaped the worst of the economic crisis and the financial outlook is positive, Borg says. (Georges Gobet/AFP/Getty Images)
UP AND UP: Swedish Finance Minister Anders Borg (C) giving a press conference at EU headquarters in Brussels. Sweden has escaped the worst of the economic crisis and the financial outlook is positive, Borg says. (Georges Gobet/AFP/Getty Images)
STOCKHOLM, Sweden—Sweden has escaped the worst of the economic crisis and the financial outlook is positive, says Swedish Finance Minister Anders Borg

"We have avoided a depression, we have not had a banking crisis and we have not experienced a collapse of public finances and that means that we, in comparison with other countries, we are very strong," said Borg at a press conference on November 16.

"Sweden has not had to experience a credit to households have been strangled in the same dramatic way as in the eurozone and the U.S., but for the Swedish part, the loan-lending is working. With the rate that the Swedish crown has today, Sweden has a strong competitive power and it helps to create capital for the business sector," said the minister.

Borg showed a curve of expectations for global economy`s recovery with Sweden and some Asian countries at the top, in a stronger position than the U.S. or Europe. The Minister pointed out, however, that this is only an expectation not something borne out by known industrial production figures.

The Finance Ministry revised Sweden’s budget forecast, showing stronger investment, exports and consumption. International demand and household wealth should improve given the stock market’s recovery and the fact that housing prices didn’t drop as orginally anticipated. High households savings are expected to decline as consumption rises.

Employment figures are at 1994 levels, with layoffs now abating from the high levels that prevailed earlier. The Finance Minister says that although the labor market has stabilized and redundancy notices have declined, the turnaround in the labor market will take some more time.

In the 1990’s, there was a half million unemployed, and afterwards, they had difficulty finding new jobs. Despite the fact that the the crisis this time is the worst since the Great Depression, the present situation is different, because more workers have remained in their jobs.

"The big challenge ahead is to prevent unemployment from becoming entrenched and to ensure that the new jobs will eventually come."

Borg said that government incentives will remain in place 2010 and 2011, for although the situation has improved, if the measures are withdrawn too early, it could jeopardize the economy, a risk Borg does not want to take.

"The conclusion is that the world has landed on its feet,” said Borg. ”In Sweden, we have not experienced any serious banking problems and we have managed to get out of this crisis without seeing a collapse of public finances. This means that we are much stronger than virtually all other countries that now need to devote the next few years to clean up public finances."