Sweden Poised for Strong Economic Growth and Recovery Through 2026-2027, Say Handelsbanken and Swedbank

Economic forecasts from Handelsbanken and Swedbank project a robust recovery and growth trajectory for Sweden in 2026 and beyond. Handelsbanken expects Sweden to lead comparable countries with the highest GDP growth — 2.7% in 2026, rising from 1.8% the previous year, and continuing with 2.4% in 2027. This growth is mainly fueled by increased household incomes, with real incomes anticipated to rise over 3% this year, boosting consumption and strong domestic demand. Business investments have shown positive trends, and despite moderate export growth hindered by global trade tensions and tariffs, particularly from the US, Sweden’s export sector has remained resilient.

Labor market improvements are forecasted, with unemployment expected to fall to 8.0% by 2027 according to Handelsbanken, though full recovery from recession is expected by 2027 as noted by Swedbank. Inflation is projected to decrease to 1.2% this year due to factors like reduced food VAT but is anticipated to rise closer to the Riksbank’s 2% target by 2027. The Riksbank is expected to maintain a gradual interest rate increase in line with strengthening economic conditions but will keep rates steady at 1.75% in the near term.

Swedbank also highlights the ongoing recovery driven by consumption and investments, reinforcing optimism about Sweden’s economic resilience. Additionally, the Swedish krona is viewed as currently undervalued and expected to strengthen as stability returns to the markets.

Christina Nyman, Chief Economist at Handelsbanken, underscores that despite volatility compared to the eurozone, Sweden’s economic fundamentals remain strong, supported by expansive economic policies including tax cuts and low interest rates. However, uncertainties persist around US trade policies that could impact export performance.

Overall, the outlook emphasizes a positive economic turnaround with balanced inflation, a strengthening labor market, and sustained growth, positioning Sweden to be at the forefront of recovery in the region over the next several years.