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Sweden lifts economic growth forecasts to 3.6%

Staff writer ▼ | December 23, 2015
Sweden raised its forecasts for economic output for both this year and next on Monday, as the combination of expansionary fiscal policy and low interest rates lift the country out of a long period of slow growth.
North of Europe   A large number of new employees in Sweden
Finance Minister Magdalena Andersson told a news conference that Sweden's economic output would expand by 3.6% in 2015 compared with a previous forecast of 2.8%. Next year the economy will grow by 3.1%, more than the 2.8% seen in September.

The government has stepped up its spending after a huge upswing in the number of asylum seekers arriving into the country over the past two months. The state of close to ten million people expects up to 190,000 migrants to arrive this year, mainly from war-torn Syria and Afghanistan.

Among other things the government has recruited a large number of new employees to help process asylum cases and organise accommodation.

That short-term boost to public spending has come at the same time as the Swedish central bank is holding interest rates at record lows as it seeks to lift inflation closer its target after four years of very low price growth.

That has led to an increase in households' disposable income and a rise in private consumption.