distribution system, excellent internal and external
communications, and a skilled labor force. Timber, hydropower, and iron ore
constitute the resource base of an economy that is heavily oriented toward
foreign trade. Privately owned firms account for about 90% of industrial
output, of which the engineering sector accounts for 50% of output and
exports. In the last few years, however, this extraordinarily favorable
picture has been clouded by inflation, growing unemployment, and a gradual
loss of competitiveness in international markets. Although Prime Minister
BILDT'S center-right minority coalition had hoped to charge ahead with
free-market-oriented reforms, a skyrocketing budget deficit - almost 13% of
GDP in FY94 projections - and record unemployment have forestalled many of
the plans. Unemployment in 1993 is forecast at around 7% with another 5% in
job training. Continued heavy foreign exchange speculation forced the
government to cooperate in late 1992 with the opposition Social Democrats on
two crisis packages - one a severe austerity pact and the other a program to
spur industrial competitiveness - which basically set economic policy
through 1997. In November 1992, Sweden broke its tie to the EC's ECU, and
the krona has since depreciated around 2.5% against the dollar. The
government hopes the boost in export competitiveness from the depreciation
will help lift Sweden out of its 3-year recession. To curb the budget
deficit and bolster confidence in the economy, BILDT continues to propose
cuts in welfare benefits, subsidies, defense, and foreign aid. Sweden
continues to harmonize its economic policies with those of the EC in
preparation for concluding its EC membership bid by 1995.
National product:
GDP - purchasing power equivalent - $145.6 billion (1992)
National product real growth rate:
-1.7% (1992)
National product per capita:
$16,900 (1992)
Inflation rate (consumer prices):
2.3% (1992)
Unemployment rate: 5.3% (1992)
Budget:
revenues $70.4 billion; expenditures $82.5 billion, including capital
expenditures of $NA (FY92)
Exports:
$56 billion (f.o.b., 1992)
commodities:
machinery, motor vehicles, paper products, pulp and wood, iron and steel
products, chemicals, petroleum and petroleum products
partners:
EC 55.8% (Germany 15%, UK 9.7%, Denmark 7.2%, France 5.8%), EFTA 17.4%
(Norway 8.4%, Finland 5.1%), US 8.2%, Central and Eastern E