The chief economists of rival banks Handelsbanken and SEB this week unveiled contrasting forecasts on the Swedish economy. While Handelsbanken’s chief economist Jan Häggström warned that US economic growth is about to wane, which could adversely affect Swedish exports, SEB’s chief economist Klas Eklund brimmed with optimism about Swedish growth.
“If US economic growth grinds to a halt, this would be negative for Swedish growth. However, this could be offset to a limited extent by a drop in interest rates,” said Häggström.
Eklund, on the other hand, said that fears of a slowdown in US growth are exaggerated and that the Swedish economy would defy this with continued growth in the next few years. SEB sees Swedish growth at 3.4 per cent this year, 3.2 per cent in 2005 and 2.9 per cent in 2006, forecasts that are roughly in line with the other estimates released in August.
But while SEB predicts growth, low inflation and more jobs ahead, it warns that excessive spending by the government and its allies, the Left and the Green Parties, ahead of the 2006 election could fuel and overheat the economy, threatening growth and stability.
Real estate sector bounces back to life
The Swedish real estate sector is expected to hit a record high this year, with large property transactions valued at SKr 100 billion kronor anticipated ahead. In the past six months, deals worth SKr 35 billion have been sealed. The acquisitions of Drott and Fabege have spiced up the mood and the market is seen bubbling with new transactions this autumn.
Tax board hits proposal to scrap inheritance tax
The Swedish Tax Board has criticised proposals from the finance ministry to abolish the inheritance tax and lower the gift tax. The board is also critical of the proposal to tax shares, reported DI, citing the board’s latest position on the issues.
Ikea plans huge investments in China
Ikea is planning a large-scale expansion in China to take advantage of the growing prosperity in the country’s major cities, reported news agency TT, noting that sales in the existing shops in Beijing and Shanghai have risen by 50 per cent over the past year.
Sources: Dagens Industri, Svenska Dagbladet,Dagens Nyheter
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