OECD Predicts Swedish Economic Recovery with Growth Acceleration in 2026

The OECD's latest Economic Outlook for Sweden foresees a strengthening economic recovery starting in 2026, driven by fiscal stimulus, stable monetary policy, and robust domestic demand. Sweden's GDP growth is expected to rise from 1.6% in 2025 to 2.6% in 2026, before slightly easing to 2.3% by 2027. Unemployment is projected to gradually decline from 8.7% in 2025 to 8.2% by 2027, while inflation is expected to stabilize, reaching the Riksbank’s 2% target by the end of 2027 after peaking at 2.8% in 2025, then falling to 1.1% in 2026 due to temporary tax cuts.

Despite positive domestic forecasts, the OECD highlights ongoing external risks including weak demand from the euro area and the US, which continue to hamper Swedish exports—especially in the automotive and steel sectors. Trade tensions also exert downward pressure on Sweden’s very open economy. Furthermore, the report notes that elevated household savings and potential geopolitical uncertainties could temper growth prospects.

Monetary policy is anticipated to remain steady through 2026, with the Riksbank keeping interest rates unchanged before a gradual increase toward 2% by late 2027. Globally, GDP growth is expected to be 3.2% in 2025, slowing to 2.9% in 2026, while risks such as overvaluation in the AI sector and potential new trade barriers add fragility to the outlook.

Analysts emphasize that the recovery relies heavily on fiscal and monetary policies supporting strong domestic demand. Swedish economic experts have also proposed a national resilience fund to mobilize private capital and enhance long-term growth, underscoring the need for sustained investment to maintain recovery momentum.

Overall, the OECD’s updated forecast portrays an optimistic but cautious view of Sweden’s economic future, with gradual improvement expected amid persistent external challenges and moderate inflation pressures.