10 ď ź KEY POLICY INSIGHTS
The economy is growing steadily Sweden is a strong knowledge-based economy, well integrated in global value chains, which ensures high standards of living, well-being, income and gender equality, as well as a high environmental quality to its inhabitants. Growth has been broad-based over the past five years, with consumption, investment and exports all contributing significantly. Meanwhile, strong domestic demand has pushed up imports (Figure 1). Figure 1. Output growth is robust and broad-based A. Real GDP growth Y-o-y % change 8
Germany
Euro area
Sweden
United States
Y-o-y % change 8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
B. Contribution to growth
% 15
Consumption
Gross capital formation
Exports
Imports
-8
2018
Total
% 15
10
10
5
5
0
0
-5
-5
-10
-10
-15
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
-15
Source: OECD Economic Outlook database. StatLink 2 https://doi.org/10.1787/888933943607
Measures of the output gap and indicators of capacity utilisation suggest the economy is operating close to full capacity (Figure 2). Even so, monetary policy remains expansionary, while fiscal policy is slightly expansionary.