Nordea Bank ABP has recently reported a positive outlook for household purchasing power in Sweden, indicating a recovery that could significantly impact the economy. According to Annika Winsth, Chief Economist at Nordea, GDP growth is projected to be 0.6% in 2024, increasing to 1.6% in 2025 and 2.6% in 2026. This growth is expected to be supported by anticipated wage increases of around 3.5% due to upcoming wage agreements, alongside rising house prices that are aligning with incomes. Furthermore, public investment is on the rise, driven by defense and infrastructure needs, which is likely to bolster domestic demand. The report also notes that interest rate cuts by the Riksbank are expected to further stimulate economic activity. In contrast, political uncertainty may pose challenges to the Swedish economy's stability. Meanwhile, US GDP growth is predicted at 2.5% for 2025, reflecting broader economic trends that could influence Sweden's economic landscape. [19b5260e]
In a broader context, the Nordic Outlook report from SEB Group forecasts stable growth across the Nordic countries, projecting global growth at just over 3% annually for 2025-2026. The report highlights that Swedish economic growth is expected to rise from 0.5% in 2024 to 3.1% in 2026, despite challenges such as weak performance in Germany affecting the euro area. Core inflation is anticipated to climb in early 2025 but is expected to fall later in the year. The Riksbank is projected to cut the policy rate to 2% in May 2025, which could further support economic activity. Additionally, Swedish exports remain strong despite broader European weaknesses, although unemployment is expected to rise to 8.7% before declining. The forecast also includes SEK 60 billion in unfunded reforms in Sweden's 2025 budget, indicating potential fiscal challenges ahead. [2b521711]
S&P Global has similarly highlighted the importance of household purchasing power in the Netherlands, forecasting that stronger domestic demand will play a crucial role in the Dutch economy's recovery starting in 2024. [e92374a8]