Nordic Economic Outlook 2019

Annual report on the economic development in the Nordic countries in terms of growth, business cycles and public finance

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The Nordic Economic Outlook is an annual report on the economic development in the Nordic countries in terms of growth, business cycles and public finance. The report is produced by the Nordic Council of Ministers and the content is prepared jointly by the Nordic Group of Macro Analysts (Nordiska konjunkturgruppen) with experts from the Finance Ministries in the five Nordic countries. The group has operated under the Nordic Council of Ministers since 2004 and exchanges information on macroeconomic and structural developments on a continuous basis.




After several years of high growth, there is now a slowdown in the Swedish economy and GDP is expected to grow by 1.4% in 2019 and in 2020. This is due to lower housing investments as well as less contribution from government consumption and exports. However, resource utilisation is estimated to be higher than normal during these years. There was a weak development in household consumption during 2018 and the first half of 2019. To some extent this is explained by temporary factors such as changed tax- and certification rules on cars. Going forward, consumption is expected to grow in line with the average rate since 2000. A stabilisation in the housing market and high household savings are two factors contributing to this. The slowdown in public consumption that we have seen lately is expected to continue due to a decline of migration related expenditures and a weaker development of tax incomes. Gross fixed capital formation has risen sharply since 2014, especially in housing, but during the first half of 2019 investments declined somewhat. After several years with increasing housing investments we have seen a decline in housing starts since 2017, although from high levels. In the coming years, housing investments are therefore expected to decrease. Furthermore, investments in the business sector excluding housing are expected to slow down due to lower global demand. The latest year’s improved world economic development has benefited demand on Swedish exports. At the same time, a strong development on domestic demand has contributed to high import growth which has dampened the net export contribution. During the first half of 2019 exports grew at a moderate pace. Several indicators, such as export orders in the industry according to the Economic Tendency Survey from NIER and Purchasing Manager Index, together with a sluggish global demand suggest a continued slowdown in exports going forward.


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