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The late Olof Palme, former Swedish prime minister, at the OECD in 1968. ©Sabine Weiss/OECD |
Income inequality is relatively low in Sweden compared to the OECD average, but a rapid rise from the 1990s has threatened this hallmark of Swedish society and has led to calls for policies to promote equality again. What are the options and can those policies work?
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Economic growth has been strong, but is projected to decline. Shortages of qualified labour and constructible land will slow residential investment, while uncertainty about global demand will slow business investment. Modest real wage gains will continue to damp consumption. The unemployment rate is levelling off as difficult-to-hire low-skilled workers make up a rising share of jobseekers. Labour market tightening will help lift inflation gradually.
Sweden’s good reputation for a clean environment may be deserved, but there are murky spots. True, it gained high marks in the recent OECD Environmental Performance Review of Sweden. It was one of the first OECD countries to cut its use of environmentally harmful chemicals, and is one of the few OECD countries on track to meet their commitments under the Kyoto Protocol to limit greenhouse gas emissions.
Economic data
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