Criticism Mounts as Swedish Economy Contracts Amid Rising Unemployment
The Swedish government's economic policies face sharp criticism amid a 0.2% GDP contraction and rising unemployment.
Key Points
- • Swedish economy shrank by 0.2% in early 2025, contrary to growth expectations.
- • Unemployment rate now the third highest in the EU.
- • Child poverty is rising, heavily affecting single-parent households.
- • Government's removal of construction sector support has exacerbated economic issues.
The Swedish government, led by Prime Minister Ulf Kristersson and Finance Minister Elisabeth Svantesson, faces increasing scrutiny regarding its economic policies following a reported 0.2% contraction in GDP for the first quarter of 2025. This downturn, unexpected by analysts who had forecasted economic growth, raises significant concerns about the country’s financial direction as Sweden now experiences the third highest unemployment rate in the European Union. The rising dissatisfaction among citizens is largely attributed to the perceived inadequacy of the government’s response to economic challenges.
Recent data from Statistics Sweden indicates that only 0.2% growth was anticipated earlier this year, reflecting a stagnated economy while child poverty has also seen a concerning increase, particularly affecting single-parent households. Critics are highlighting the Kristersson administration's failure to address these issues effectively, with particular disdain aimed at its decision to remove state investment support for rental housing which heavily impacted the construction sector. The collapse within this sector is considered a critical factor contributing to the current economic woes.
Moreover, the government's attempts to deflect blame onto external factors, such as former U.S. President Donald Trump's trade policies, have been dismissed as insufficient. While global trade uncertainties, influenced by Trump's actions, are recognized, the strength of Sweden's export sector is noted as a mitigating factor against deeper economic decline.
As public patience wanes, there are increasing calls for alternative measures, including potential actions by the Riksbank, such as lowering interest rates to stimulate economic growth. Analysts express concern that the current measures, primarily centered around tax deductions, fail to create meaningful impact in revitalizing Sweden's economy. This growing dissatisfaction is reflected in poor opinion polls for the government, indicating a significant disconnection between policy decisions and the realities faced by ordinary citizens during this economic downturn.