Economy of Sweden

By | April 29, 2022

For 100 years, Sweden from a backward and one of the poorest countries in Europe, as it was in the middle. In the 19th century, where 70% of the population was employed in agriculture, it turned into one of the most developed industrial countries in the world with a high standard of living for the population. The transformation of the economy from a backward to an advanced industrial economy was facilitated by the presence of rich natural resources – iron ore, timber, hydropower, as well as talented engineers and skilled workers. In the 1870s Swedish iron ore and timber were essential for the industrial development of Europe. The expansion of Swedish exports contributed to the industrialization of the country and the growth of the urban population. On the basis of Swedish inventions, new companies in metallurgy and mechanical engineering were created and quickly grew. With the rapid growth of the population, emigration played an important role,

According to cheeroutdoor, Sweden avoided participation in both world wars, which allowed it not only to maintain its production potential and labor resources, but also to significantly enrich itself in deliveries to the warring countries and in the restoration of the European economy.

For several decades after the 2nd World War, the Swedish economy continued to develop rapidly. Those were her golden years. A welfare state was built. However, in the 2nd half. 1970s and early 1990s Sweden has experienced severe economic crises. The volume of GDP was reduced, the volume of public debt increased, and in the 1990s. depreciation of the Swedish krona. The economy and public finances have undergone a rigorous reorganization. To the beginning 21st century the state budget became balanced, inflation fell and economic growth accelerated (in 1997-2000 it averaged 4%). High-tech enterprises actively developed.

In 2002, the GNP increased by 1.6% and amounted to 2340 billion kroons, and per capita – 262.2 thousand kroons. Inflation – 2.4%, gross capital investment – 400 billion crowns (2002).

Sweden employs 50% of the population. This figure is high because more than 75% of women aged 16-64 work. Before the beginning 1990s the unemployment rate was low. However, it has grown significantly since then. In 2002, the economically active population was 4.4 million people, unemployment – 4%.

Sectoral structure of the economy: agriculture – 2%, industry – 29, services – 69 (in terms of contribution to GDP), agriculture – 2, industry – 24, services – 74% (in terms of employment).

Swedish industrial production is often based on local raw materials: timber and iron ore. Mechanical engineering enterprises, including the automotive industry, account for 40% of the total production, the woodworking and pulp and paper industries – a little over 20%, the share of the chemical industry – approx. 12%. In the 1990s pharmaceuticals, production of telecommunication equipment and automobiles developed most dynamically. Information technology is playing an increasingly important role in the economy. Sweden is one of the leading countries in this area.

Sweden’s energy consumption per capita is one of the highest in the world as a result of the cold climate, the concentration of energy-intensive industry and the high standard of living. Cheap hydropower was an important factor in the industrial development of the country. OK. 15% of energy is provided by power plants built mainly on the rivers of Northern Sweden. St. 40% of the energy consumed in the country is provided by imports of oil, 7% by imports of coal and coke. In 2000, electricity generation was 144.6 billion kWh. Hydroelectric power plants produce 54% of electricity, nuclear power plants – 37%.

Agriculture plays a rather limited role in economic life. Only 8% of Sweden’s territory is used in agricultural production. However, agriculture is highly productive. Sweden satisfies St. 80% of food needs from own production, incl. almost completely in milk, meat, bread, potatoes.

Agriculture is dominated by fodder crops (barley, wheat, oats, and rye), potatoes, sugar beets, and rapeseed. Most of the crops are devoted to barley, oats and winter wheat. Under sown grasses, approx. 1/3 of cultivated land. Agriculture is characterized by its close relationship with forestry. OK. 75% of all farmers combine both activities.

The leading branch of agriculture is meat and dairy cattle breeding, which accounts for approx. 80% income. The role of meat in marketable products is constantly increasing. Of the other branches of animal husbandry, bacon and meat pig breeding are the most developed. Pork makes up more than 1/2 of the total meat production in the country.

Sweden is dominated by small family farms and approx. 80% of farmers farm on their own land. Farmers receive their main income from the sale of dairy products and meat. OK. 40% of cultivated land is leased.

The heyday of fishing in Sweden came in the 1950s and 1st half. 1960s mainly due to the large stocks of herring in the North Sea. The depletion of fish stocks has led to a reduction in catches. Now more than 1/2 of the catch falls on herring and cod.

The total length of railways is 12,821 thousand km (of which almost 8 thousand km are electrified), motorways – 211 thousand km, gas pipelines – 88 km. Merchant fleet – 174 ships with a total displacement of 2.6 million tons. Main ports: Gothenburg, Stockholm, Malmö. 90% of Sweden’s foreign trade goes by sea On July 1, 2000, the Øresun Bridge was opened, connecting Malmö and Copenhagen. The country has 255 airports, 6 million telephones and approximately 4 million mobile phones, 169 television stations, 4.6 million television sets, and 6.02 million Internet users (2002).

Over the past decades, Swedish trade has undergone significant changes in order to be more accommodating to consumers and their habits. The total number of stores has noticeably decreased (from 9.2 thousand in 1980 to 6.8 thousand in 1998). During the same period, sales increased by almost 3 times. Now more than 1/2 of the stores selling ready-made goods are open on Sundays. The self-service system has spread widely. Out-of-town self-service stores (hypermarkets) appeared, offering goods at low prices. Supermarkets, among which supermarkets stand out, have a full range of food and ready-made goods. There are large “chain” stores in selected areas. Most of the wholesale trade is carried out by independent enterprises. Cooperatives play an important role in trade.

Tight fiscal policy is aimed at stabilizing the positive balance of the state budget by approving spending ceilings and budgeting for 3 years in advance. The most important issue in Sweden’s economic policy remains participation in the EMU, from which it abstained in 1999 and following a referendum in 2003.

In recent years, Sweden’s central bank, Sveries Riksbank, has set an annual inflation target of 2% and follows the European Central Bank in interest rates. Since 1992, the Swedish krona has moved to a floating rate, which has declined significantly over the next decade.

In 2002, state revenues amounted to 56.9% of GNP, expenditures – 55.5%, the balance of the state budget – 1.4%, public debt – 52.4% of GNP, or 1235 billion crowns (2003). Government consumption amounted to 656 billion crowns (2002).

The duration of the working week is 40 hours. Paid vacation is 5 weeks. After the tax reform of 1991, the majority of employees pay only 100 crowns of state income tax (the maximum rate reaches 25%), while the communal income tax rates are approximately 31%. Corporate income tax 28%. Value added tax ranges from 6 to 25%. Employers contribute 33% and employees pay 6% to cover social costs. In addition, enterprises deduct approx. 7% for pension provision in accordance with collective agreements.

The standard of living of the population in Sweden is considered one of the highest in the world. The wages of women relative to men in Sweden are the highest in the world. The hourly wage of a worker in the private sector is 112.7 kroons, the monthly wage of an employee in the private sector is 26,180 kroons (2003). In terms of income equalization, Sweden is ahead of other countries in the world. The richest 10% of households accounted for 20% of income, the poorest 10% for 4%. Personal consumption amounted to 1139 billion crowns (2002).

Sweden’s economy is closely linked to the outside world and heavily dependent on foreign trade. OK. 50% of manufactured industrial products are exported. Exports, which amounted to 1012 billion kroons in 2002, are dominated by machinery and equipment (35%), vehicles, paper, pulp, timber, ferrous metals, chemical products. 55% of exports went to the EU countries (Germany – 11%, Great Britain – 9%, Denmark – 6%, Finland – 6%), to the USA – 11%, to Norway – 9% (2001). Imports, which amounted to 871 billion kroons, are dominated by machinery and equipment, oil and oil products, chemical products, vehicles, ferrous metals, food products, clothing (2002). In 2001, 66% of imports came from EU countries (Germany – 18%, Great Britain – 9%, Denmark – 8%, the Netherlands – 7%, France – 7%), from Norway – 9%, from the USA – 7%.

In 2002, the positive balance of payments – 4.2% of GDP.

Economy of Sweden