Sweden - Economy

Sweden is a highly industrialized country. The shift from agriculture to industry began in the 1930s and developed rapidly during the postwar period. In 1995, manufacturing contributed $44.5 billion to GDP. Agriculture contributed $19.4 billion; energy and water, $5.7 billion; construction, $12.2 billion; and financial and other services, $82.3 billion. Average annual growth of the GDP declined from 4.3% in the 1960s to 2% in the 1970s and to 1.6% in the 1980s. It grew by 1.4% in 1990 but fell 1.4% in 1991, 1.9% in 1992, and 2.1% in 1993, the longest period of decline in the 20th century. In 1994, the economy grew by 2.2%, ending the deeply troubling reversals of past years. From 1998 to 2000 GDP growth averaged 3.77%, but the global economic slowdown from 2001 helped reduce GDP growth to 1.6% (est.) in 2001 and 1.9% (est.) in 2002.

Swedish living standards and purchasing power are among the highest in the world. However, inflation was a problem for several year after the international oil shocks of the 1970s. the annual rise in consumer prices peaking at 13.7% in 1980 after the second oil shock. The rate of price increase declined thereafter, but was still 10.4% in 1990 and 9.4% in 1991 before falling to 2.2% in 1992. By 1998 and 1999, inflation had all but disappeared, with annual rates of 0.4% and 0.3% respectively. In 2000, inflation rose to 1.3%, and during the slowed growth in 2001 and 2001, the annual inflation rate averaged 2.5%. After hitting 14% in 1994, unemployment began to gradually recede. By 1998, unemployment was down to 6.5 and by 2001, 3.9%. The estimate for 2002 is 4%. Swedish industry is outstanding in supplying quality goods and specialized products—ball bearings, high-grade steel, machine tools, and glassware—that are in world demand. Intimate contact between trade, industry, and finance is a feature of the economy, as is the spread of factories to rural districts. Some natural resources are ample, the foremost being lumber, iron ore, and waterpower. Sweden's lack of oil and coal resources makes it dependent on imports for energy production, despite abundant waterpower.