Wednesday, June 22, 2016

KI booming, GROWTH downshifting from a high level – Dagens Industri

STOCKHOLM (AFX) After seven years of recession, it is now booming in Sweden, but growth will now come down from a high level.

That said, the NIER’s forecast manager Jesper Hansson at a press briefing on Wednesday, where he presented KI’s new economic forecast.

“We have a boom in Sweden, which is run very high investment and an expansionary economic policy,” he said.

He said that it is rare to KI in real time proclaims boom, but they now feel quite confident that Sweden is in a boom.

He said that the global economy improves slowly, but a sluggish development of world trade and industrial holding down growth. KI in the forecast assumes that the British vote for a continued EU membership. Is not it so it will have “very little” negative economic impact for Sweden. The political risk is more difficult to assess.

“It’s very difficult to judge. You simply have to wait and see what happens,” said Jesper Hansson.

KI estimates that growth in Sweden will now shift down from a high level, but KI’s own barometer indicator signals continued higher growth than normal. High investment and a rapid increase of the population is driving growth.

The demographic trend with a strong increase in elderly and younger make that public consumption is growing rapidly coming years and contribute to growth.

Jesper Hansson also noted that housing prices in Sweden will not increase as rapidly in recent months, although it remains a strong performance. Household expectations about house prices have also come down.

“It looks to have calmed down,” he said.

Housing construction has risen sharply, but supply constraints will dampen construction, and it will not keep pace with population growth.

KI forecasts that unemployment will drop to the end of 2017, when it turns up again when the economic situation is normalized.

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