Sweden Faces Economic Strain as Government Reform Space Ends and Electricity Prices Soar

Finance Minister Elisabeth Svantesson announced on February 13, 2026, that the government’s reform space for the upcoming mandate period is essentially exhausted, signaling difficult times ahead for Sweden’s economic policy. This grim assessment sparked sharp criticism from the Social Democrats, with party leader Mikael Damberg branding the situation as 'deeply irresponsible' and accusing current leaders Ulf Kristersson and Jimmie Åkesson of having 'emptied the barns' of fiscal resources.

Amid these fiscal constraints, Swedish households are simultaneously grappling with soaring electricity prices, reaching the highest levels in years. Factors such as low wind power production and diminished water reservoirs have driven energy costs up significantly, compounded by high prices across Europe and increased exports to Finland.

Families nationwide report staggering increases in electricity bills. Kamilla Olesen from Niemisel received a bill of 9,500 SEK—almost three times her typical winter costs—prompting her family to forego heating with a heat pump in favor of alternative methods. Similarly, Hannes Olsson of Märsta faced a bill nearing 10,000 SEK despite previous investments in energy efficiency, expressing frustration over the continuing rise. Kristina Eksholm in Matojärvi was shocked by a 16,300 SEK electricity bill, illustrating the growing strain on household finances. Many are resorting to reduced energy consumption and wood stoves to manage costs.

Together, these developments highlight the dual economic challenges confronting Sweden in early 2026: a government constrained in its ability to implement new reforms as economic pressures rise, alongside a household energy crisis that exacerbates financial stress for many. The government faces mounting pressure to address both fiscal limitations and the urgent need for energy relief amidst escalating costs and political opposition criticism.