Swedish Economy Stable Amid Optimism and Challenges in Early 2026

Swedish Finance Minister Elisabeth Svantesson has conveyed a cautiously optimistic outlook for Sweden's economy in early 2026, emphasizing its current stability despite global uncertainties and domestic challenges.

Speaking in press briefings on January 16, 2026, Svantesson highlighted six consecutive months of rising optimism among both households and businesses, a key signal of economic confidence. She attributed this positive sentiment partly to significant public investments in defense, justice, and infrastructure projects, such as roads and railways, which are expected to boost growth further.

A notable factor bolstering the economy is the recent downturn in inflation rates, now nearing the Riksbank's target, which alongside rising wages, improves citizens' purchasing power. Svantesson pointed to the government's 2026 budget focused on strengthening this purchasing power amidst a low domestic demand environment caused by the previous prolonged recession. Riksbank Governor Erik Thedéen also noted inflation's retreat and real wage growth as strong foundations for stable increases in Swedish consumption.

However, challenges persist. Unemployment remains comparatively high, and many households still face economic hardship despite improved conditions. Svantesson expressed concern about these labor market issues and acknowledged that the recovery and growth trajectory will not be without difficulties.

Externally, Svantesson stressed caution given global risks such as unpredictable U.S. political developments and regional conflicts. She was particularly troubled by the global debt level edging towards 100% of GDP, spotlighting the rising national debt in the United States and its potential impact on global economic stability.

In summary, the Swedish economy is entering 2026 in a stable state marked by growing optimism and stronger consumer prospects. However, vigilance remains necessary amid ongoing domestic obstacles and significant external uncertainties. Svantesson concluded with an encouraging message: "The recovery has begun and the economy is on the rise," while underscoring the imperative to continue strengthening Swedish growth moving forward.