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Economy of Sweden PDF Print E-mail
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Monday, 30 May 2011 08:46

SwedenSweden is an export-oriented mixed economy featuring a modern distribution system, excellent internal and external communications, and a skilled labour force. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Sweden's engineering sector accounts for 50% of output and exports. Telecommunications, the automotive industry and the pharmaceutical industries are also of great importance.

Sweden is the tenth largest supplier of weapons in the world and is the third largest supplier of weapons to Pakistan. Agriculture accounts for 2 percent of GDP and employment. Income is relatively flatly distributed, Sweden has the lowest Gini coefficient (0.23) of any country.

In terms of structure, the Swedish economy is characterised by a large, knowledge-intensive and export-oriented manufacturing sector, an increasing, but comparatively small, business service sector, and by international standards, a large public service sector. Large organisations both in manufacturing and services dominate the Swedish economy

The 20 largest (by turnover in 2007) companies registered in Sweden are Volvo, Ericsson, Vattenfall, Skanska, Sony Ericsson Mobile Communications AB, Svenska Cellulosa Aktiebolaget, Electrolux, Volvo Personvagnar, TeliaSonera, Sandvik, Scania, ICA, Hennes & Mauritz, IKEA, Nordea, Preem, Atlas Copco, Securitas, Nordstjernan and SKF. Sweden's industry is overwhelmingly in private control; unlike some other industrialised Western countries, such as Austria and Italy, publicly owned enterprises have always been of minor importance.

Some 4.5 million residents are working, out of which around a third has tertiary education. GDP per hour worked is the world's 9th highest at 31 USD in 2006, compared to 22 USD in Spain and 35 USD in United States. GDP per hour worked is growing 2½ per cent per year for the economy as a whole and the trade-terms-balanced productivity growth is 2%. According to OECD, deregulation, globalisation, and technology sector growth have been key productivity drivers. Sweden is a world leader in privatised pensions and pension funding problems are relatively small compared to many other Western European countries.

The typical worker receives 40% of his income after the tax wedge. The slowly declining overall taxation, 51.1% of GDP in 2007, is still nearly double of that in the United States or Ireland. The share of employment financed via tax income amounts to a third of Swedish workforce, a substantially higher proportion than in most other countries. Overall, GDP growth has been fast since reforms in the early 1990s, especially in manufacturing

The World Economic Forum 2009–2010 competitiveness index ranks Sweden the 4th most competitive economy in the world. In the World Economic Forum 2010–2011 Global Competitiveness Report, Sweden climbed two positions, and is now ranked 2nd in the world. Sweden is ranked 6th in the IMD Competitiveness Yearbook 2009, scoring high in private sector efficiency. According to the book, The Flight of the Creative Class, by the U.S. economist, Professor Richard Florida of the University of Toronto, Sweden is ranked as having the best creativity in Europe for business and is predicted to become a talent magnet for the world's most purposeful workers. The book compiled an index to measure the kind of creativity it claims is most useful to business—talent, technology and tolerance.

Sweden maintains its own currency, the Swedish krona (SEK), a result of the Swedes having rejected the euro in a referendum. The Swedish Riksbank—founded in 1668 and thus making it the oldest central bank in the world—is currently focusing on price stability with an inflation target of 2%. According to the Economic Survey of Sweden 2007 by the OECD, the average inflation in Sweden has been one of the lowest among European countries since the mid-1990s, largely because of deregulation and quick utilisation of globalisation.

The largest trade flows are with Germany, the United States, Norway, the United Kingdom, Denmark and Finland.

 

Last Updated on Monday, 30 May 2011 10:08