Sweden’s centre-right government raised its 2026 GDP growth forecast to 2.5% from 2.3%, citing sustained policy support for households and businesses ahead of the September 13 election.
Finance Minister Elisabeth Svantesson told reporters that Sweden is now in a significantly stronger position than in 2022, citing improved inflation dynamics and a resilient recovery. The government attributed the upgrade to measures including fuel tax cuts, reduced VAT on food, and higher in-work tax credits, which have eased pressure from the post-pandemic cost-of-living crisis.
The revised outlook aligns with a broader trend of disinflation, with headline inflation reported below 1%, supporting real income growth. The labour market has also strengthened, though sentiment among lower-income households remains subdued.
The government’s forecast for 2027 remains unchanged at 2.5%, positioning Sweden to outpace the European Union, where growth is projected at 1.1% this year. The ECB’s policy easing has contributed to the improved macroeconomic backdrop.
Political momentum is tightening ahead of the vote. A poll released Thursday showed the opposition bloc leading with 52.4%, while the ruling coalition and the Sweden Democrats combined at 45.6%. The exchange rate stood at $1 = 9.5201 Swedish crowns on Thursday.
The government has signalled further measures if re-elected, including expanded free kindergarten access and additional in-work tax credits to bolster purchasing power.
