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Sweden Economy 1996
Aided by a long period of peace and neutrality during World War I through
World War II, Sweden has achieved an enviable standard of living under a
mixed system of high-tech capitalism and extensive welfare benefits. It has
a modern distribution system, excellent internal and external
communications, and a skilled labor force. Timber, hydropower, and iron ore
constitute the resource base of an economy that is heavily oriented toward
foreign trade. Privately owned firms account for about 90% of industrial
output, of which the engineering sector accounts for 50% of output and
exports. In 1990, agriculture accounted for only 1.2% of GDP and 1.9% of the
jobs, Sweden being about 50% sufficient in most products. In the last few
years, however, this extraordinarily favorable picture has been clouded by
inflation, growing unemployment, and a gradual loss of competitiveness in
international markets. Although Prime Minister BILDT's center-right minority
coalition had hoped to charge ahead with free-market-oriented reforms, a
skyrocketing budget deficit - about 14% of GDP in FY93/94 projections - and
record unemployment have forestalled many of the plans. Unemployment in 1994
is estimated at around 9% with another 5% in job training. Continued heavy
foreign exchange speculation forced the government to cooperate in late 1992
with the opposition Social Democrats on two crisis packages - one a severe
austerity pact and the other a program to spur industrial competitiveness -
which basically set economic policy through 1997. In November 1992, Sweden
broke its tie to the EC's ECU, and the krona has since depreciated about 25%
against the dollar. The boost in export competitiveness from the
depreciation helped lift Sweden out of its 3-year recession. To curb the
budget deficit and bolster confidence in the economy, the new Social
Democratic government is proposing cuts in welfare benefits, subsidies,
defense, and foreign aid. Sweden has harmonized its economic policies with
those of the EU, which it joined at the start of 1995.
GDP - purchasing power parity - $163.1 billion (1994 est.)
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National product real growth rate:
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National product per capita:
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Inflation rate (consumer prices):
$70.9 billion, including capital expenditures of $NA (FY93/94)
$59.9 billion (f.o.b., 1994)
machinery, motor vehicles, paper products, pulp and wood, iron and steel
products, chemicals, petroleum and petroleum products
EC 55.8% (Germany 15%, UK 9.7%, Denmark 7.2%, France 5.8%), EFTA 17.4%
(Norway 8.4%, Finland 5.1%), US 8.2%, Central and Eastern Europe 2.5% (1992)
$49.6 billion (c.i.f., 1994)
machinery, petroleum and petroleum products, chemicals, motor vehicles,
foodstuffs, iron and steel, clothing
EC 53.6% (Germany 17.9%, UK 6.3%, Denmark 7.5%, France 4.9%), EFTA (Norway
6.6%, Finland 6%), US 8.4%, Central and Eastern Europe 3% (1992)
iron and steel, precision equipment (bearings, radio and telephone parts,
armaments), wood pulp and paper products, processed foods, motor vehicles
animal husbandry predominates, with milk and dairy products accounting for
37% of farm income; main crops - grains, sugar beets, potatoes; 100%
self-sufficient in grains and potatoes; Sweden is about 50% self-sufficient
in most products
transshipment point for narcotics shipped via the CIS and Baltic states for
the European market
ODA and OOF commitments (1970-89), $10.3 billion
1 Swedish krona (SKr) = 100 oere
Swedish kronor (SKr) per US$1 - 7.4675 (January 1995), 7.7160 (1994), 7.7834
(1993), 5.8238 (1992), 6.0475 (1991) 5.9188 (1990)
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