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Sweden Economy 1996

    • Overview:
      Aided by a long period of peace and neutrality during World War I through World War II, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. Timber, hydropower, and iron ore constitute the resource base of an economy that is heavily oriented toward foreign trade. Privately owned firms account for about 90% of industrial output, of which the engineering sector accounts for 50% of output and exports. In 1990, agriculture accounted for only 1.2% of GDP and 1.9% of the jobs, Sweden being about 50% sufficient in most products. In the last few years, however, this extraordinarily favorable picture has been clouded by inflation, growing unemployment, and a gradual loss of competitiveness in international markets. Although Prime Minister BILDT's center-right minority coalition had hoped to charge ahead with free-market-oriented reforms, a skyrocketing budget deficit - about 14% of GDP in FY93/94 projections - and record unemployment have forestalled many of the plans. Unemployment in 1994 is estimated at around 9% with another 5% in job training. Continued heavy foreign exchange speculation forced the government to cooperate in late 1992 with the opposition Social Democrats on two crisis packages - one a severe austerity pact and the other a program to spur industrial competitiveness - which basically set economic policy through 1997. In November 1992, Sweden broke its tie to the EC's ECU, and the krona has since depreciated about 25% against the dollar. The boost in export competitiveness from the depreciation helped lift Sweden out of its 3-year recession. To curb the budget deficit and bolster confidence in the economy, the new Social Democratic government is proposing cuts in welfare benefits, subsidies, defense, and foreign aid. Sweden has harmonized its economic policies with those of the EU, which it joined at the start of 1995.

    • National product:
      GDP - purchasing power parity - $163.1 billion (1994 est.)

    • National product real growth rate:
      2.4% (1994 est.)

    • National product per capita:
      $18,580 (1994 est.)

    • Inflation rate (consumer prices):
      2.5% (1994 est.)

    • Unemployment rate:
      8.8% (1994 est.)

    • Budget:

        $47.9 billion

        $70.9 billion, including capital expenditures of $NA (FY93/94)

    • Exports:
      $59.9 billion (f.o.b., 1994)

        machinery, motor vehicles, paper products, pulp and wood, iron and steel products, chemicals, petroleum and petroleum products

        EC 55.8% (Germany 15%, UK 9.7%, Denmark 7.2%, France 5.8%), EFTA 17.4% (Norway 8.4%, Finland 5.1%), US 8.2%, Central and Eastern Europe 2.5% (1992)

    • Imports:
      $49.6 billion (c.i.f., 1994)

        machinery, petroleum and petroleum products, chemicals, motor vehicles, foodstuffs, iron and steel, clothing

        EC 53.6% (Germany 17.9%, UK 6.3%, Denmark 7.5%, France 4.9%), EFTA (Norway 6.6%, Finland 6%), US 8.4%, Central and Eastern Europe 3% (1992)

    • External debt:

    • Industrial production:
      growth rate 9% (1994)

    • Electricity:

        34,560,000 kW

        141 billion kWh

        consumption per capita:
        14,891 kWh (1993)

    • Industries:
      iron and steel, precision equipment (bearings, radio and telephone parts, armaments), wood pulp and paper products, processed foods, motor vehicles

    • Agriculture:
      animal husbandry predominates, with milk and dairy products accounting for 37% of farm income; main crops - grains, sugar beets, potatoes; 100% self-sufficient in grains and potatoes; Sweden is about 50% self-sufficient in most products

    • Illicit drugs:
      transshipment point for narcotics shipped via the CIS and Baltic states for the European market

    • Economic aid:

        ODA and OOF commitments (1970-89), $10.3 billion

    • Currency:
      1 Swedish krona (SKr) = 100 oere

    • Exchange rates:
      Swedish kronor (SKr) per US$1 - 7.4675 (January 1995), 7.7160 (1994), 7.7834 (1993), 5.8238 (1992), 6.0475 (1991) 5.9188 (1990)

    • Fiscal year:
      1 July - 30 June

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