Sweden : 2024 Article IV Consultation-Press Release; and Staff Report

After a strong post-pandemic performance, economic activity has weakened. GDP contracted slightly in 2023. An unprecedented monetary policy tightening started in mid-2022 to rein in inflation, which has been declining after peaking at 10.8 percent in end-2022. Weak real incomes, elevated interest expenses, and declining real estate valuations have weighed on private consumption and residential investment and strained the highly levered commercial real estate sector. Policies need to carefully maneuver the economy. Strengthening productivity growth is a key medium-term challenge