The economically difficult times that have characterized Sweden over the past year look to ease towards the end of 2024. There are still a lot of clouds of worry, but in a few years these may be gone.
This is stated by the Norwegian Economic Institute in a new report in which they took the pace of the Swedish economy.
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Swedish households save more – consume less
According to the institute, Sweden’s economy will continue to be characterized by reduced consumption, less production and increased unemployment – quite simply a downturn.
In an interview with SVT’s Ekonomibyrån, the Director General of the Economic Institute says: Albin Kainelainen that the unchanged situation is due to Swedish households saving more and holding tighter in their wallets, rather than spending.
– Now we have been in a very long period, over several years, when Swedish households did not increase their consumption, he tells the channel.
The Economic Institute’s Director General Albin Kainelainen has spoken to SVT. Photo: The Economic Institute’s press photos.
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Positive news for all wage earners: Then wages can recover
But it is possible to distinguish a glimmer of light – at least for the wage earners.
– Incomes for households are starting to increase more, says Kainelainen in SVT.
It is real wages that are increasing and will do so until the year 2027, when they are expected to be fully recovered and back to the 2021 level.
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News24 have talked to Elias Oswaldexpert on wages and households’ disposable income at the Economic Institute.
– That real wages are increasing means, in short, that the rate of wage growth is higher than inflation. This means that wage increases provide increased purchasing power, he says, and continues:
– We’ve had a couple of years when wages have increased but you haven’t been able to buy more for your wages because inflation has been higher. Now it is the opposite situation.
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This is how household finances can change. Photo: Patrik Österberg/STELLA Pictures.
Despite the fact that real wages are expected to increase, there are several elements that can affect Sweden’s economy negatively. There are several wars going on in the outside world which create uncertainty in the economy, household consumption remains low and unemployment remains high, reports SVT.
At Konjunkturinstitutet, however, it is believed that the continued increase in real wages can help to remove one of these clouds of worry.
– We believe that higher real wages lead to an increase in household consumption. It has been quite weak for several years, says Osvald to Nyheter24.