Sweden's Economic Recovery Gears Up Amid Calls for Strategic Rare Earth Metal Refining
Sweden's economy is set for growth in 2026 and 2027 as experts urge strategic investment in rare earth metal refining to reduce reliance on China and boost industrial competitiveness.
- • Swedbank forecasts Swedish economic growth of 2.4% in 2026 and 2.2% in 2027 with improved household purchasing power.
- • Interest rates expected to remain stable until late 2027 before a possible increase.
- • Jesper Wärn advocates for Sweden to invest in rare earth metal refining to reduce dependency on China, which currently controls 90% of global refining capacity.
- • The EU aims for 10% mining and 40% refining of critical raw materials within its borders, but major refining investments are still needed in Sweden.
Key details
Swedbank's recent economic report signals the start of a recovery for Sweden's economy, with positive growth expected in 2026 and 2027. The bank forecasts an economic growth rate of 2.4% in 2026 and 2.2% in 2027, driven by an increase in household purchasing power due to lower inflation, tax cuts, and reduced interest costs. Chief economist Mattias Persson highlighted that these factors will stimulate consumption and strengthen the labor market, although resource utilization remains low, indicating a gradual return to normal market conditions. Interest rates are anticipated to stay steady at 1.75% until late 2027, with a possible rise afterward. (Source: 128781)
Concurrently, there is a pressing call within Sweden to enhance its industrial strategy by investing in rare earth metal refining capabilities. Jesper Wärn, a civil engineering student, emphasized that Sweden must move beyond merely mining rare earth metals to also refining them domestically. Currently, China controls about 90% of the global refining capacity, representing a significant supply chain risk for technologies dependent on these metals, including smartphones and electric vehicles. Wärn pointed to the EU’s Critical Raw Materials Act, which aims for 10% of raw materials to be mined within the EU and 40% refined locally, yet investments are heavily skewed toward mining. Sweden's potential—exemplified by LKAB’s upcoming demonstration plant in Luleå slated for 2026—could be further developed with a clear national strategy focused on refining to create skilled jobs and bolster competitiveness. Wärn advocates for Sweden to become Europe's hub for sustainable metal refining, a move critical for future innovation, employment, and economic resilience. (Source: 128944)
Together, these developments reflect Sweden's dual focus on recovering from recent economic challenges while strategically positioning itself in the global industrial landscape. The economic recovery projections offer optimism for growth and employment, while the urging of investment in refining rare earth metals underlines a proactive approach to securing supply chains and fostering industry in a critical technological sector.