Between 1946 and 1953, the Swedish economy was dominated by expansion. Thereafter, although production continued to increase (at a lessened rate), inflation was a matter of concern. Domestic investment has remained at about the same level as in 1939, but a larger share has come from public investment. Expansion of output slowed down during the international oil crisis and recession of 1974–75, largely as a result of a weakening of foreign demand for Swedish products, but employment remained high. Thus far, the economy has managed to contain inflationary trends within reasonable limits. Although some industries (the railways, iron-ore mines, etc.) have been nationalized for a long time, private concerns carry on most of Sweden's industry, in terms of both number of workers and value of output.
During periods of unemployment such as the world recession of 1980–81, the central government and the municipalities have expended funds to provide additional employment and to keep the unemployment rate relatively low. The jobless have been put to work building dwellings and highways, extending reforestation work, and constructing water and sewer installations, harbors, lighthouses, railroads, defense projects, and telecommunications facilities. Although the government resorted to stockpiling industrial goods to combat the economic slowdown in the mid-1970s, the cost was considered too high, and the policy was not repeated during the recession of the early 1980s. More recently, the emphasis has been on cutting costs and restraining inflation to make Swedish goods more competitive in the international marketplace.
Regional development has been fostered by the use of investment funds (a tax device permitting enterprises to set aside tax-free reserves during boom years to be used for investment during recessions), relief works, and government lending to small-scale industry. A national program for regional development was introduced in 1972 to develop services and job opportunities in provinces that have lagged behind in industrial development. Projects in northern Sweden benefited most from this program.
In 1991, the government announced a plan to privatize 35 wholly or partially state-owned firms with annual turnovers totaling K R 150 billion. This program was delayed by the economic recession, however. A 10-year, K R 110 billion program of infrastructure investment was announced in 1994. More than 90% of the money would be spent on the road and rail networks, and a bridge that would link Malmö with Copenhagen.
Sweden's entry into the EU in 1995 dominated the second half of the 1990s. As a result of EU membership, Sweden harmonized its trade laws with those its fellow members and continued privatization and liberalization of its economy. Sweden also qualified for membership in the European Monetary Union (EMU) but decided to opt out. Future membership is contingent upon passage of a referendum (one was scheduled for September 2003).
As of the end of 2001, around 34% of the labor force was employed in the public sector, and general government expenditure accounted for around 55% of gross domestic product (GDP). Economic growth in the late 1990s and into the early 2000s was relatively strong, employment rates were high, there were large surpluses in both the general government and the external current accounts, and the public debt was declining. In 2000, the government set a target for employment, that 80% of the working age population would have a regular job by 2004.