Swedish government sees economy slowing this year amid high inflation

© . FILE PHOTO: Swedish Finance Minister Mikael Damberg attends a press conference to propose aid for households affected by high electricity prices, in Rosenbad, Stockholm, Sweden Jan. 12, 2022. Johan Jeppsson /TT News Agency/via REUTERS STOCKHOLM () – Sweden’s economy is set to slow this year and headline inflation is expected to hit its highest level since the early 1990s, the government said in a pre-budget forecast Friday. The government has revised its growth forecast for this year down to 3.1% from 3.4% in December. Overall inflation averaged 4.6%, compared to 2.1% expected in December. “The Russian invasion of Ukraine is bringing rising prices, a lot of uncertainty and less trade,” Finance Minister Mikael Damberg told reporters. “Sweden will be affected by the war in Ukraine due to lower growth and higher price increases.” Earlier this week, the NIER think tank predicted growth of 3.3% in 2022 and inflation of 5.2% for the year. Headline inflation stood at 4.5% in February, as measured against the same month in 2021. The Swedish economy recovered quickly from the pandemic and is expected to remain relatively strong despite the Russian invasion of Ukraine. However, rising inflation has forced the government to take action to mitigate the impact of higher energy and fuel prices on consumers and bring defense spending forward. The war, which Russia calls a “special military operation,” has also forced millions of people to flee Ukraine, and the government has set aside nearly 10 billion kroner ($1.07 billion) in its upcoming mini-budget to provide housing and other services to refugees arriving in the country. Sweden. On April 19, the government will publish its mini-spring budget.

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