Business Monitor International


Sweden Business Forecast Report

Published 16 December 2014

  • 41 pages
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  • Includes 3 free updated quarterly reports
 
$1,195.00
Sweden Business Forecast Report

Core Views

  • Sweden's status as an open trade-oriented economy means that its growth prospects will depend heavily upon a continued recovery in the rest of Europe.

  • The  outlook for business investment and exports will improve, but will be restrained alongside a poor recovery in the eurozone economy.

  • The coalition government led by the Social Democrats that was elected in September 2014 is in a precarious position due to its minority status in parliament. We expect a shift in government policy toward greater state interventionism, including tax hikes and a rise in government spending.

Major Forecast Changes

  • We have lowered our end-year repo rate forecasts to 0.00% in both 2014 and 2015, and to 0.75% in 2016 (from 0.25%, 0.50%, and 1.25%, respectively).

Key Risks To Outlook

  • Downside Growth Risks From Europe: A relapse in the European economic recovery would leave Sweden's open economy vulnerable to external demand shocks.

Macroeconomic Forecasts (Sweden 2013-2016)
Indicator 2013 2014f 2015f 2016f
Nominal GDP, USDbn 572.1 545.3 541.0 554.9
Real GDP growth, % y-o-y 1.6 2.0 2.4 2.5
Consumer price inflation, % y-o-y, eop 0.0 0.3 1.5 2.0
Exchange rate SEK/USD, eop 7.20 7.17 7.42 7.33
Budget balance, % of GDP -1.2 -2.1 -1.4 -0.4
Current account balance, % of GDP 6.2 5.9 5.6 5.4
f=BMI Forecast. Source: Statistics Sweden/BMI

Click here to explore data

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Centre-Left Government Faces Stern Test Of Mandate In Budget Vote
8
Sweden's centre-left government, which came in to office on October 3, faces an early test of its mandate in a budget vote scheduled for
Sweden's centre-left government, which came in to office on October 3, faces an early test of its mandate in a budget vote scheduled for
December 3
We believe that the budget will pass, despite the government's minority status in parliament, but the risk of a new election
is significant
Table: Political Outlook
8
Long-Term Political Outlook
10
Stability Assured Over Long Term
10
With a long-term political risk score of 94
Benefiting
from an advanced level of institutional development, a long history of democratic governance and an established foreign policy based
from an advanced level of institutional development, a long history of democratic governance and an established foreign policy based
on neutrality, the country faces limited underlying risks to political stability over the long term
However, the rise of a populist antiimmigration
movement poses risks to both governance and Swedish civil society
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Growth To Remain Limited By External Weakness
14
Strong domestic demand has helped Sweden weather weak global conditions over the past few years, and household consumption will
Strong domestic demand has helped Sweden weather weak global conditions over the past few years, and household consumption will
continue to drive growth
A rebound in business investment will help mitigate headwinds that will slow consumption growth in 2015-16,
including falling consumer confidence, a weakening currency, and tightening mortgage regulations
Table: GDP By Expenditure
14
Monetary Policy
16
SEK: Modest Upside Versus Euro
16
The Swedish krona will appreciate modestly versus the euro in the next two years, but depreciate against the US dollar
Although the
central bank has adopted a zero interest rate policy due to rising signs of deflation, the Swedish economy remains a relative growth
central bank has adopted a zero interest rate policy due to rising signs of deflation, the Swedish economy remains a relative growth
outperformer among developed markets, the krona's valuation is reasonably competitive, and monetary policy overseas will likely
outperformer among developed markets, the krona's valuation is reasonably competitive, and monetary policy overseas will likely
become even looser in coming quarters
Table: CURENCY FORECAST
16
Balance Of Payments
18
External Surpluses To Narrow Further
18
Although Sweden will continue to enjoy current account surpluses over the forecast period to 2018, the trade balance will narrow further
Although Sweden will continue to enjoy current account surpluses over the forecast period to 2018, the trade balance will narrow further
as European demand remains subdued and domestic consumption remains relatively strong
We project the current account balance to
decline from 5
Table: Current Account
19
Chapter 3: 10-Year Forecast
21
The Swedish Economy To 2023
21
Well-Positioned For The Long Term
21
Sweden is among the most strategically well-positioned economies in the developed world, and this is reflected in our 10-year growth
Sweden is among the most strategically well-positioned economies in the developed world, and this is reflected in our 10-year growth
forecasts, which expect steady expansion through to 2023
The balance of payments is extremely stable and will be buoyed by a robust
current account surplus, fiscal dynamics are among the best in Europe, and the country will continue to benefit from a highly productive
current account surplus, fiscal dynamics are among the best in Europe, and the country will continue to benefit from a highly productive
workforce over the long term
Table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Operational Risk
23
Operational Risk Index
23
Operational Risk
24
Table: Developed States - Labour Market Risk
24
Table: Developed States - Logistics Risk
27
Table: Developed States - Crime And Security Risks
29
Table: Developed States - Trade And Investment Risk
32
Chapter 5: Key Sectors
35
Infrastructure
35
Table: Construction And Infrastructure Industry Data
35
Table: Construction And Infrastructure Industry Data
36
Other Key Sectors
41
table: Pharma Sector Key Indicators
41
table: Telecoms Sector Key Indicators
41
table: Food and Drink Sector Key Indicators
42
table: Autos Sector Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Warning Signs Growing
43
Table: Global Assumptions
43
Table: Developed States , Real GDP Growth, %
44
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table: Emergi ng Markets , Real GDP Growth , %
45

The Sweden Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Sweden and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Sweden's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Sweden's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Sweden's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Sweden, including currency volatility, the commodity price boom and protectionist policies.

The Sweden Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Swedish economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Sweden through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Sweden Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Sweden and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Sweden, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Sweden over the next 5-years?

BMI's Sweden country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Swedish Market - Political Strengths, Weaknesses, Opportunities and Threats facing Sweden.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Sweden's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Sweden's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Sweden, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Sweden's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express