Sweden: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Sweden

International Monetary Fund

No 2025/079, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2025 Article IV Consultation with Sweden discusses that with inflation successfully brought under control, adopting a more supportive macroeconomic monetary and fiscal policy mix and the focus on productivity are appropriate. High uncertainty and a more challenging external backdrop are poised to test Sweden’s export-oriented economy, while slowing productivity growth and an aging population weigh on long-term growth. Inflation is expected to remain anchored around the target, with downside risks from a weaker recovery offset by upside risks from global shocks. The current neutral monetary policy stance is appropriate given double-sided risks to inflation. Macroprudential policy settings are appropriate and should be kept until systemic risks meaningfully subside. A moderately expansionary fiscal stance is appropriate. If downside risks materialize, automatic stabilizers should be allowed to fully operate, with scope for targeted support. Actions on multiple fronts will be necessary to revive higher productivity growth. Sweden’s economy remains robust and resilient and is well positioned to face a more challenging environment.

Keywords: FSAP participation; consultation cycle; exchange arrangement; mandatory FSAP; government inquiry; Inflation; Housing prices; Macroprudential policy; Financial sector stability; Global (search for similar items in EconPapers)
Pages: 76
Date: 2025-04-01
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