Sweden’s economy is performing strongly and has exceeded expectations for the second quarter. Statistics Sweden presented strong GDP figures on Monday morning: GDP increased by 1 per cent compared to the previous quarter, and compared to the same quarter in 2017, GDP increased by 3.3 per cent.
Finance Minister Magdalena Andersson says, “This indicates a continued strong economy, although at the same time it is a quarterly figure and you should interpret this with care.”
Forecasters had on average predicted an increase of 0.4 per cent compared to the year’s first quarter and an increase of 2.5 per cent compared to the second quarter of 2017.
The National Institute for Economic Research (NIER) is cautious in its comments to the data, saying it believes capacity utilisation may be close to its peak, given the strong GDP growth. The theory might be that Sweden will need to import to meet demand, but imports have declined by 0.1 per cent. “We have some questions to ask of Statistics Sweden about the outcome,” says NIER’s Ylva Hedén Westerdahl.
So far the United Arab Emirates has emerged as the only buyer of Saab’s GlobalEye surveillance aircraft, which was unveiled in February this year, but Lars Tossman, who serves as head of Saab’s Airborne Surveillance Systems division, is convinced that there will be more. “The need for surveillance has increased. We are seeing it in Europe, where there are concerns about what Russia is up to, and we are seeing it in Asia-Pacific,” he says.
The GlobalEye has the capacity to be airborne more than 11 hours. This means that air forces will not need to deploy fighter jets “just to check what is going on” and, therefore, will not need as many fighters, claims Mr Tossman. “One GlobalEye can replace four to five fighter jets,” he says.
European markets breathed a sigh of relief on Thursday following the news that the EU and the US had reached a deal to calm trade war fears, but experts are warning that the ceasefire may only be temporary and that the conflict is not over.
“I believe there is around a 50 per cent chance the existing tariffs will be lifted,” says Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, while Handelsbanken strategist Lars Henriksson suggests many obstacles lie ahead.
“Trump’s strategy is similar to one that is used on second-hand auction sites. If you say a bicycle is not worth a single penny, you can bring the price down. It should be remembered that he is a businessman at heart,” he says.
Sweden is the second most expensive country in the EU for food after Denmark and the current drought is likely to push up food prices further, with the agricultural cooperative Lantmännen reporting that this year’s grain harvest will be the worst in 25 years.
The drought has destroyed thousands of hectares of crops and forced farmers to send cattle to early slaughter.
Rural Affairs Minister Sven-Erik Bucht (S) describes the situation as grave: The Federation of Swedish Farmers (Lantbrukarnas Riksförbund) estimates that the drought will cost farmers around SEK 10 billion
Mr Bucht now says farmers will not be able “to cope on their own” and that the government “is working intensively to draw up a national aid programme,” which it hopes to present shortly.
At a meeting on Thursday, the government is expected to grant the Swedish Civil Contingencies Agency (MSB) extra funds so that the agency can compensate the emergency services in the municipalities affected by the forest fires blazing across the country. Justice Minister Morgan Johansson (S) believes the compensation could amount to SEK 300 million.
Ahead of Wednesday’s talks between European Commission President Jean-Claude Juncker and US President Donald Trump to avert a full-blown transatlantic trade war, Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, is less than optimistic, warning of the risk of a “downward spiral of revenge tariffs”.
“In the worst-case scenario, many everyday items will become more expensive. A range of products, including bikes, mascara and food could end up being twice as expensive. In the longer term, high tariffs could also lead to unemployment,” he warns.
Telia Company announced a SEK 9.2 billion deal to acquire Bonnier Broadcasting on Friday, its second major acquisition of the week. On Tuesday the telecoms operator said it was buying TDC’s Norwegian business for the equivalent of SEK 23 billion.
The acquisition of Bonnier Broadcasting, which includes Swedish TV4 and streaming service C More as well as Finnish MTV, will allow Telia to expand its media business.
The deal has been criticised by politicians, since Sweden’s two largest TV companies, public service broadcaster SVT and commercial channel TV4, will come under the control of the government, which is Telia’s biggest shareholder with a 37 per cent stake.
Enterprise Minister Mikael Damberg met Telia Board Chairman Marie Ehrling on Friday morning to discuss the situation. The minister has since told Dagens Industri that the government does not plan to sell its stake in Telia, although further analysis of the deal will be required.
Moderate Party spokesperson Elisabeth Svantesson has said in a comment that it is “highly problematic that the Swedish state … will become the dominant owner on the media market”.
An estimated 2 million cubic metres of timber to a value of SEK 600 million has burned in the forest fires sweeping across, according to Swedish Forest Agency (Skogstyrelsen). Länsförsäkringar, which insures around 8 million hectares of forest in Sweden, as well as many properties in the affected areas, expects to pay record-breaking claims.
The Västmanland wildfire of 2014 – Sweden’s most expensive fire to date – cost the insurer some SEK 400 million. The cost to the Swedish economy was estimated at SEK 1 billion.
Speaking at the Federated AI Meeting (FAIM) in Stockholm on Wednesday, Digital Development Minister Peter Eriksson (Green) proposed a broad investigation into the way in which digitalisation and artificial intelligence (AI) will affect the labour market and the need for lifelong learning.
The minister, who wants to pool the knowledge of labour market, education and government agencies in the investigation, said there needs to be a holistic approach to help people keep up with technology.
Telecom operator Telia Company has agreed to buy TDC’s Norwegian business, which includes fibre and TV provider GET, in a SEK 22.8 billion deal. GET has more than 518,000 households and business connected to the fibre-based network, as part of a total of one million private and business customers who use the TV and broadband services.
The purchase will give Telia a full range of fixed-line, mobile and TV services in Norway, and puts pressure on competitor Telenor.
CEO Johan Dennelind does not expect the acquisition to threaten the planned purchase of Bonnier Broadcasting. “We can afford to strike the deal without affecting our buyback programme or dividend policy. That is an important message,” he said.
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